Remodelers perceived weakening demand for current and future residential remodeling jobs in last year’s final quarter, according to the latest NAHB Remodeling Market Index (RMI).
The RMI’s current market conditions indicator slid to 27.7, down from 33.5 in the third quarter, while future expectations plummeted from 27.7 to 19.6. Both readings were historic lows for the index, which was started in 2001.
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.
“During the last quarter many remodelers were wondering if their phones were still working because they received virtually no calls for work,” said NAHB Remodelers Chairman Greg Miedema, CGR, CGB, CAPS, a remodeler from Tucson, Ariz. “The jobs we are getting are for smaller projects and necessary home maintenance.”
Compared to the previous quarter, the 2008 fourth quarter RMI showed market conditions for major additions and alterations declining from 29.4 to 20.2, while conditions for minor additions and alterations dropped from 38.5 to 33.5. Maintenance and repair fell from 30.9 to 27.6.
Overall, major additions and other large remodeling jobs have experienced a greater decline than smaller remodels and maintenance.
“Remodelers suggest that the huge decline in consumer confidence, volatility in the stock market and uncertainty about the future of the economy have resulted in home owners delaying remodeling decisions,” said NAHB Chief Economist David Crowe. “Consumers are waiting to see conditions improve before committing to home improvement spending.”
All the RMI measures of future expectations in the remodeling market — calls for bids, amount of work committed for next three months, backlog of remodeling jobs and appointments for proposals — were down in the final three months of last year.
Expectations for the remodeling market slipped in all regions of the country during the fourth quarter — from 32.9 to 24.9 in the Northeast, from 31.5 to 30.7 in the South, from 36.2 to 28.0 in the Midwest and from 36.1 to 25.0 in the West.