Remodeling Dips

CONTACT: Kelly Mack

Remodeling Dips but Shows Signs of Stabilization

WASHINGTON, July 29 – The remodeling market slid backward during the second
quarter, according to the latest National Association of Home Builders’
(NAHB) Remodeling Market Index (RMI). The RMI (combining current and future
market indicators) sunk to 40.7 from 47.9 in the first quarter. Current
market conditions slid back to 42.6 from 44.5 in the previous quarter.
Future indicators of remodeling business declined to 38.9 from 43.1 in the
last quarter.

The RMI measures market demand for current and future residential remodeling
projects based on remodelers’ perceptions and indicators of future activity
like calls for bids. Any number below 50 indicates that more remodelers say
market conditions are getting worse than report improving conditions. The
RMI has been running below 50 since the final quarter of 2005 and during the
last quarter approached break even again.

“Remodelers are suffering from weak consumer confidence and constricted
credit lines,” said NAHB Remodelers Chairman Donna Shirey, CGR, CAPS, CGP, a
remodeler from Issaquah, Wash. “Homeowners are delaying remodeling projects
because of economic uncertainty.”

The current conditions indices for the remodeling market worsened in two
regions: Northeast 41.4 (from 46.6 in the first quarter); and South 42.4
(from 44.1). However, current remodeling indices improved in the Midwest
44.7 (from 43.8) and the West 42.0 (from 34.8). Major additions fell to 44.2
(from 48.0), as did minor additions to 45.8 (from 47.3). Maintenance and
repair indicators showed a milder decline, from 37.3 to 36.6.

All the indices for future remodeling business declined. Calls for bids
dropped to 46.2 (from 49.4). Work committed for the next three months
slumped to 27.9 (from 29.9). The backlog of remodeling jobs dipped to 37.7
(from 44.8), and appointments for proposals slid to 43.7 (from 48.1).

Responding to additional special questions in the survey, remodelers also
reported on the changing composition of remodeling projects. Sixty-one
percent said bathroom remodeling was one of their most common projects
during the first half of 2010. Kitchen remodeling came next with 52 percent.
In previous years, kitchen remodeling was reported as the most common
activity by more than 70 percent of remodeler respondents.

In general, comparisons to historical data show that larger remodeling
projects (such as room additions, whole house remodeling, bathroom
additions, and second story additions) have been on the decline for several
years. Smaller remodeling jobs (such as window and door replacements) have
remained relatively steady, or, in the case of handyman services, actually
increased. For example, only 29 percent of remodelers reported that room
additions were a common activity in 2010, compared to 70 percent in 2004.
Conversely, none of the professional remodelers responding to the survey
reported that it was common for their companies to perform handyman services
in 2004, while 33 percent of remodelers were regularly providing handyman
work in the first half of 2010.

“While remodelers are continuing to struggle, we expect the rest of 2010 to
be a period of stabilization for remodeling, with the first stages of
recovery emerging by the end of the year, followed by a more robust recovery
beginning early next year,” said NAHB Chief Economist David Crowe. “For now,
professional remodelers are taking on smaller projects and working to find
consumers willing to spend money despite the economic uncertainty.”

For more information about remodeling, visit


ABOUT THE RMI: The RMI is based on a quarterly survey of professional
remodelers, whose answers to a series of questions were assigned numerical
values to calculate two separate indexes. The first index gauges current
market conditions and is based on remodelers’ reports of major and minor
additions and alterations, plus maintenance work and repairs, on both owner-
and renter-occupied dwellings. The second index summarizes indicators of
future remodeling activity and is based on remodelers’ responses to
questions about calls for bids, amount of work committed for next three
months, job backlogs and appointments for proposals.

ABOUT NAHB REMODELERS: NAHB Remodelers is America’s home for professional
remodelers, representing the more than 20,000 remodeling industry members of
the National Association of Home Builders (NAHB). Founded in 1982, the
organization provides information, education and designation programs to
improve the business and construction expertise of its members and to
enhance the professional image of the industry. Its membership incorporates
145 local councils in 43 states. Learn more about remodeling at

ABOUT NAHB: The National Association of Home Builders is a Washington-based
trade association representing more than 175,000 members involved in home
building, remodeling, multifamily construction, property management,
subcontracting, design, housing finance, building product manufacturing and
other aspects of residential and light commercial construction. NAHB is
affiliated with 800 state and local home builders associations around the
country. NAHB’s builder members will construct about 80 percent of the new
housing units projected for 2010.

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