NAHB Remodeling Market Index Takes a Nasty Dip

Remodelers are feeling decidedly less optimistic about the remodeling market, according to the latest Remodeling Market Index from NAHB.

The index, released today, shows a drop from 47.9 in the first quarter to 40.7 in the second quarter. An RMI below 50 means more remodelers feel the market is deteriorating than feel it is improving. Last quarter was the closest the RMI has come to 50 since 2005.

The RMI increased in the Midwest (from 43.8 to 44.7) and West (42.0 from 34.8), but dropped in the Northeast (46.6 to 41.4) and South (44.1 to 42.4).

Two comments on the drop from NAHB officials:

"Remodelers are suffering from weak consumer confidence and constricted credit lines," said NAHB Remodelers Chairman Donna Shirey, CGR, CAPS, CGP, a remodeler from Issaquah, Wash. "Homeowners are delaying remodeling projects because of economic uncertainty."


"While remodelers are continuing to struggle, we expect the rest of 2010 to be a period of stabilization for remodeling, with the first stages of recovery emerging by the end of the year, followed by a more robust recovery beginning early next year," said NAHB Chief Economist David Crowe. "For now, professional remodelers are taking on smaller projects and working to find consumers willing to spend money despite the economic uncertainty."

Other questions showed that NAHB members are undertaking smaller projects than in the past, as well, with marked decreases in room additions and kitchens and increased work in bathrooms and handyman projects. We saw similar results in our Business Results Study released in April, which showed a 47 percent drop in average project size. (No link, because HousingZone isn't back up yet, but e-mail me if you'd like more info.)

EPA Delays Lead-Paint Rule Enforcement

Great news from the EPA today, via NARI.

The agency has agreed to delay enforcement of the LRRP rule until October 1, 2010, citing the need for more time for firms to get trained and certified.

Click here to read the EPA's letter announcing the delay.

Remodeling still bigger than new construction

For the sixth quarter in a row, investment in home improvement has topped that of new construction. (h/t to Calculated Risk for crunching the numbers from GDP residential investment.)

This is where the longterm growth is in the housing industry. Once the recession ends and unemployment goes down, we're poised for a big comeback in the remodeling industry. New construction? I've got my doubts. But remodeling is in great shape for the longterm. An aging housing stock, desire to be in closer suburbs and the city core, the green movement -- all factors that have us set for a nice rebound.

(You know, sure would be a great time to restart a remodeling trade pub -- just saying)

Lead paint rules finally getting some consumer attention

Now that the new lead paint rules have been in place for a little over a week, it seems like it's finally getting some attention from the consumer-oriented media.

The Chicago tribune had an article today on the new rules (even quoting the research we did at Professional Remodeler earlier this year). It's good to see the information finally getting out there, especially as remodelers have been trying to get the media to cover this for months.

Other outlets, including the Pittsburgh Tribune-Review, Baltimore Sun and Atlanta Journal-Constitution have covered it in recent days as well. Still, most remodelers I've talked to say that the average homeowners has no idea this is going on. Hopefully, some more media coverage will help to change that.

Why I love the remodeling industry

Remodeling is a great industry filled with great people.

That's all I can say after the flood of support and well wishes I've gotten since Reed shut down Professional Remodeler on Friday -- calls, e-mails, comments through the various social media sites. It's great to hear what an impact we had on the industry at PR, and the offers of people to help me find what comes next for me.

I just got back from the NAHB Spring Boards in DC, where I was out trying to network and just generally keep up on the industry, and it was more of the same out there. Hopefully, I'll figure out a way to stay involved, whether or not we get Professional Remodeler restarted.