Remodeling Slows in the Second Quarter

 

Remodeling Market Index has two components, measuring current and future remodeling activity. In the second quarter of 2011, current market conditions fell to 44.8 from 46.1 the previous quarter. The future activity component dropped to 43 from 46.8 in the first quarter of the year.
Courtesy of NAHB

National Association of Home Builders Remodeling Market Index (RMI) dipped to 43.9 in the second quarter of 2011 from the 46.5 posted in the first quarter of the year. 

Remodeling activity slowed for the same reasons new construction stagnated in recent months; namely a sluggish economy, lack of consumer confidence, and a strict lending environment. The popular section 25C remodeling tax credit was significantly weakened for 2011, likely leading to decreased demand for energy-efficient upgrades to existing homes.

Nonetheless, the current reading is the second highest RMI in nearly four years, topped only by the first quarter of 2011.

Despite the slowdown from previous suggestions of sector growth, total spending on remodeling related improvements remain the largest component of overall construction spending. Such spending is also closely connected to levels of existing home sales.

- Courtesy of NAHB