WASHINGTON — Residential Remodeling activity remained sluggish during the second quarter of 2008, according to the National Association of Home Builders' (NAHB) Remodeling Market Index. The current market conditions indicator rested at 41.8, the same level as the first quarter, while the future expectations measure rose slightly to 38 from 37.9 in the previous quarter.

The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number over 50 indicates that the majority of remodelers view market conditions as improving. The RMI has been running below 50 since the final quarter of 2005, implying shrinkage of remodeling expenditures since that time.

“Remodelers are experiencing slower activity in markets nationwide, particularly for major improvements to owner-occupied housing,” said NAHB Remodelers Chairman Lonny Rutherford, CGR, CAPS, CGP, a remodeler from Farmington, NM. “While markets remain pretty active, most remodelers are taking on a greater number of smaller jobs to maintain their businesses.”

The index shows a gradual decline in overall remodeling activity since 2005. Nationally, major additions and alterations declined slightly to 43.18 (from 44.15) during the second quarter, while minor additions and alterations increased slightly to 42.89 (from 41.57). Maintenance and repair declined to 39.06 (from 39.68).

Regionally, current market expectations dropped in the second quarter, with the Northeast falling to 32.8 (from 36.4), the South to 40.1 (from 42.2), and the West to 42.4 (from 42.9). The Midwest, however, increased to 52.9 (from 44.1). All measures for future expectation (calls for bids, amount of work committed for next three months and appointments for proposals) slumped slightly except for a small increase in backlog of remodeling jobs at 42.13 (from 41).

Eighty-four percent of surveyed remodelers also reported homebuilders diversifying into remodeling due to the downturn in home building, thus contributing to more saturated remodeling market conditions.

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