Builders Assoc. says homeowners still eager to remodel, expects trend to continue
"The high rates of home sales and home price appreciation are helping fuel strong remodeling activity," said Remodelors Council Chairman Don Novak who is also a remodeler from Cedar Rapids, Iowa. "Though we saw little change overall, the RMI [Remodeling Market Index] still shows above average activity for the past quarter and this will continue into the third."
NAHB's RMI is culled from a quarterly survey of people in the remodeling business and is seasonally adjusted. The current market conditions index dipped one half a percentage point from 52.9 to 52.4. The future expectations index also moved down from 53.6 to 52.8. Both indexes continue to show above normal activity.
Regionally, strong readings in the Northeast, South and West were partially offset by a sub-par reading for the Midwest. Current market conditions in the Northeast improved from 53.8 to 59.1 and the West gained nearly five points from 53.6 to 58.5. Conditions dropped in the Midwest from 48.9 to 44.7 and in the South from 58.4 to 55.7.
"A maintenance of positive readings in most parts of the country reflects remodelers' confidence in their component of the housing sector," said NAHB Chief Economist Dave Seiders. "In markets where there is strong real estate appreciation, remodeling continues to see near-record growth."
Owner-occupied units saw a slight increase in current market activity moving from 55.8 to 63.3. Renter-occupied units had a nearly two point decrease from 47.7 to 45.8. In the futures expectation index, the reverse trend was true. Owner-occupied units index dropped from 56.7 to 55.8 and renter-occupied units index increase from 41 to 43.
The RMI "special questions" section survey covered questions on remodelers' profile. In 2005, 64 percent of remodelers responding had 20 or more years of experience. This is an increase from 59 and 54 percent from 2003 and 2002, respectively. The level of education saw wide changes from previous years. In 2005, 32 percent of remodelers had completed an advanced degree in graduate school. Previously in 2003 and 2002, only 10 and 11 percent earned an advanced degree. While 42 percent of respondents said they earned a college degree this year, this is a marked decline from 53 percent in 2003 and 50 percent in 2002.