REMODELING ACTIVITY SLOWS
With rising interest rates curbing refinancing activities, which homeowners often use to fund remodeling projects, the remodeling market slowed during the fourth quarter of 2005, according to the National Association of Home Builders' Remodeling Market Index (RMI). For the first time since the first quarter of 2003, the RMI components dipped below 50; indices above 50 indicate more remodelers view market conditions as good versus poor.
During the fourth quarter of 2005, the current market conditions component, based on existing home additions, alterations and repairs being completed, declined 4.3 points to 46.6, while the future expectations index, determined by factors such as the amount of work committed for the next three months and the backlog of remodeling jobs, slipped to 47.5 from 51.8. Regionally, the West reported the strongest remodeling activity with the current and future RMI components increasing to 58.5 and 63.5, respectively. Remodeling activity declined in the South, Northeast, and Midwest regions.