More Homeowners Staying Put and Updating

February 04, 2012

With so many homeowners stuck in their homes and unable to sell, more are making the most of it and remodeling.

The Remodeling Market Index (RMI) rose from 41.7 in the third quarter of 2011 to 46.6 in the fourth, its highest level in five years, according to the National Association of Home Builders.

“As more consumers remain in their homes rather than move in this economy, remodelers benefited from a gradual increase in home improvement activity, taking us to a five-year high,” said NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP. “2011 ended on a strong note for the remodeling industry.”

In the fourth quarter, the RMI component measuring current market conditions rose to 48.4 from 43.0. The RMI component measuring future indicators of remodeling business increased from 40.4 to 44.8.

An RMI above 50 means that more remodelers believe market activity is strong rather than weak. Two of the indices reported levels over 50: Calls for bids rose from 45.4 to 50.7 and appointments for proposals jumped from 43.3 to 50.1. The RMI for major additions went from 45.2 to 52.3 and minor additions improved from 45.7 to 50.1.

Unfortunately, the index measuring work committed for the next three months rose only slightly, from 29.9 to 31.5.

“With several key components above 50, the latest RMI provides reason for guarded optimism going forward,” said NAHB Chief Economist David Crowe. “The residential remodeling market has been improving gradually, mirroring the trend in other segments of the housing market. Stringent lending requirements and economic uncertainty continue to be a drag on demand, but we expect a modest growth in remodeling activity to continue throughout 2012.”

Can’t afford an all-out remodel? Check back to Chicago Real Estate Forum tomorrow, when we offer some inexpensive redecorating tips for your home, including some ways to celebrate Pull Your Sofa Off the Wall Month.

Categories: Remodeling

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