NAHB Remodeling Market Index Hits Four-Year High

In another sign of recovery for the remodeling market, the NAHB's Remodeling Market Index is at its highest level since before the recession.

The index stands at 46.5, up from 41.5 in the fourth quarter of 2010 and the highest mark since the fourth quarter of 2006.

While remodelers are reporting a better market, it's far from being considered a good market. An RMI of 50 is when an equal number of remodelers report the market is improving and slowing, so the first quarter mark is still on the negative side.

Last week, the Harvard Joint Center for Housing Studies also projected slower growth in the remodeling market this year than it had originally expected.

Current market conditions for the first quarter of 2011 rose to 46.1 from 43.3 in the
previous quarter. Future market indicators climbed to 46.8 from 39.7 in the previous quarter.

"Remodelers report a jump in activity so far this year and have been receiving more calls for work and appointments," says NAHB Remodelers Chairman Bob Peterson, a remodeler from Ft. Collins, Colo. "However, many home owners are still slow to commit to remodeling due to feeling uncertain about the economic recovery and difficulty obtaining loans."

Regional break downs for current remodeling market conditions showed growth in all but regions except the Midwest. where the RMI declined from 54.3 to 47.1 (which is still the highest regional RMI). The Northeast 46.1 (up from 38.8 in the fourth quarter), South 46.1 (from 45.8), and West 46.1 (from 39.7) all improved.

All current remodeling market indicators increased: major additions to 50.3 (from 48.6 in the fourth quarter), minor additions to 48.0 (from 43.9), and maintenance and repair to 39.5 (from 37.0). Future market indicators also improved across the board: calls for bids rose to 53.1 (from 47.2), appointments for proposals to 52.4 (from 43.1), backlog of remodeling jobs to 49.7 (from 42.6), and amount of work committed for the next three months to 32.1 (from 25.9).