WASHINGTON —
Although residential
remodeling remained relatively weak during the third quarter of 2009,
remodelers are starting to report that conditions in their markets are
stabilizing, according to the latest National Association of Home Builders
(NAHB) Remodeling Market Index (RMI). The current market conditions index rose
slightly to 39.8 from 38.1 in the second quarter. The index of future
indicators jumped to 38.7 from 34.2 in the previous
quarter.  Although this marked the third straight quarter of
improvement, both indices remain well below the break-even point of 50.

 

The RMI
measures remodeler perceptions of market demand for current and future
residential remodeling projects. 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.

 

“Some
remodelers are receiving more calls for bids, but it is still extremely
difficult to close a sale,” said NAHB Remodelers Chairman Greg Miedema, a
remodeler from Tucson, AZ. “Financing continues to be an impediment, with many
homeowners not able to secure home equity loans or other lines of credit.”

 

The
summary index of future market indicators showed greater improvement. Among the
components of future indicators, calls for bids jumped to 46.5 (from 38.8 in
the second quarter). Appointments for proposals grew to 43.5 (from 40.3).
Amount of work committed for the next three months climbed to 27.5 (from 23.3).
And backlog of remodeling jobs increased to 37.2 (from 34.4).

 

“Remodelers
are no longer reporting markets deteriorating to the same degree as earlier in
the year, but credit and financing of remodeling jobs remains a huge hurdle to
overcome in closing sales,” said NAHB Chief Economist David Crowe.
“Inaccurately low home appraisals also hurt remodelers, because they hamper
both home equity loans and sales of existing homes that often stimulate
remodeling.”

 

For
more information about remodeling, visit www.nahb.org/remodel.

 

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