Remodeling activity continued to grow in the second quarter of 2005, according to the National Association of Home Builders' (NAHB) Remodeling Market Index (RMI). The second quarter results were slightly below the seasonally adjusted first quarter of 2005 but remained in the positive growth range.
"The high rates of home sales and home price appreciation are helping fuel strong remodeling activity," said Remodelors Council Chairman Don Novak. "Though we saw little change overall, the RMI still shows above average activity for the past quarter and this will continue into the third."
The RMI is derived from a quarterly national survey of more than 500 remodelers and is seasonally adjusted. The current market conditions index dropped one half a point from 52.9 to 52.4. The future expectations index also moved down from 53.6 to 52.8. Both indexes continue to show above normal activity.
Regionally, strong readings in the Northeast, South and West were partially offset by a sub-par reading for the Midwest. Current market conditions in the Northeast improved from 53.8 to 59.1 and the West gained nearly five points from 53.6 to 58.5. Conditions dropped in the Midwest from 48.9 to 44.7 and in the South from 58.4 to 55.7.
"A maintenance of positive readings in most parts of the country reflects remodelers' confidence in their component of the housing sector," said NAHB Chief Economist Dave Seiders. "In markets where there is strong real estate appreciation, remodeling continues to see near-record growth."
Owner-occupied units saw a slight increase in current market activity moving from 55.8 to 63.3. Renter-occupied units had a nearly two-point decrease from 47.7 to 45.8. In the futures expectation index, the reverse trend was true. Owner-occupied units index dropped from 56.7 to 55.8 and renter-occupied units index increase from 41 to 43.
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