Expectations for remodeling sales in the next six months are low, according to the 1,500 remodelers surveyed for the NAHB’s Remodeling Market Index. Third-quarter results show a 45.6 overall rating for future expectations, a drop from 57.8 in the second quarter. Numbers over 50 indicate that remodelers view conditions as better than they did the previous quarter; the converse is true for numbers below 50. Remodelers in the Northeast were especially - and understandably - shaken by Sept. 11, with the future rating dropping from 62 to 44.9. The current market conditions index took a lesser but still substantial hit, dropping from 55.1 in the second quarter to 46.1 in the third.
Though the terrorist attacks did not necessarily have an immediate negative impact for remodelers - 52% of those surveyed reported little or no change in their volume, and 10% reported an increase - future business is at stake. According to the RMI, 17% of remodelers said projects have been scaled back, and 26% said projects are being put on hold.
At an estimated annualized value of $103.6 billion, homeowner remodeling spending for the third quarter of 2001 dropped 0.4% from the previous quarter and 0.3% from the third quarter a year ago, according to the Remodeling Activity Indicator from Harvard University’s Joint Center for Housing Studies. Although mortgage rates dropped in October to levels not seen since the 1960s, consumer confidence also declined in October, falling 11.5 points to 85.5, the lowest since February 1994, as measured by the monthly Consumer Confidence Index of the Conference Board, an international, multi-industry research organization. Kermit Baker, director of the Joint Center’s Remodeling Futures Program, predicts the negatives will offset the positives.