Third-Quarter Index Points to an ‘Amazing’ Year for Remodeling Activity - 12/20/2004 - Mortgage Loan Refinance Debt Equity

Third-Quarter Index Points to an ‘Amazing’ Year for Remodeling Activity

“This has been an amazing year for remodeling,” said NAHB Remodelors™ Council Chairman Douglas Sutton, Sr., CGR, CAPS, a remodeler in Springfield, IL. “With home sales remaining at record-breaking levels, the major additions and alterations sector has kept many remodelers busy working through growing backlogs.”

In the quarterly survey of 500 remodelers from around the country, current conditions in the July-August period rose to 51.8, up from 50.6 in the previous quarter, and future expectations remained unchanged at 52.4. Starting with the third quarter, the index is now being seasonally adjusted.

“With the ongoing favorable interest rates, rising employment and household incomes, and high home price appreciation rates, we expect the remodeling market to remain on a strong growth path,” said NAHB Chief Economist David Seiders. “The RMI is still above 50, which signals that the market remains healthy. All indicators point to another booming year for remodeling in 2004 and the outlook for 2005 is quite good as well.”

The index showed an increase in major additions and alterations from 47.4 in the second quarter to 49.2 in the third, and a rebound in maintenance and repairs from 51.8 to 54.6. As in other recent quarters, the strength of remodeling activity was heavily concentrated in owner-occupied housing.

The third quarter survey asked remodeling companies special questions about where they buy materials and who influences their buying decisions during projects. Among the results:

• Respondents reported that specialty distributors were the leading source of windows, doors, patio doors, carpeting and flooring.
• About 80% of the remodelers reported purchasing lumber structural panels and particle board from lumber yards, which are also the primary source for siding.
• Subcontractors/installers are the most common source for plumbing fixtures.
• Remodelers and home owners seemed to be about evenly split in choosing materials during the remodeling process. But remodeling contractors are more likely to choose windows, doors, roofing, lumber siding and lighting, while home owners are more influential in selecting appliances, plumbing fixtures, flooring, carpeting and cabinets. Paint selection was evenly split between owners and remodelers.

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