National Association of Home Builders Remodeling Market Index Update

Each quarter, the NAHB surveys builders and remodelers to gather data on the number of addition and repair jobs that have been completed. In addition to recording the volume of work, the NAHB typically includes special survey questions in an effort to obtain more specific information for the Remodeling Market Index or RMI.

For the first quarter of 2012, remodelers were asked which jobs were the most prevalent and what were the main reasons homeowners chose to remodel. It was no surprise that the most popular jobs were for kitchens and bathrooms. Since the RMI began in 2001, those two types on renovations have consistently vied for the top two spots on the survey. 

78% of those surveyed indicated that bathroom updates were the most requested project. Second place went to kitchen jobs (69%), followed by window and door replacements (44%), whole house remodeling (36%), and repairs for property damage caused by pests and weather (35%).

The answers to the other survey question as to what motivated homeowners to seek a remodeler revealed a new trend. In the last two years, the goal of remodeling in an effort to increase a home’s value has declined. It seems that many have resigned themselves to the current sluggish market, chosen to update their property and just stay put. More than 50% of respondents reported that the top two reasons homeowners contracted builders were to repair and replace outdated components and to improve their home’s amenities.

A comparison of past surveys shows that although the RMI was at its highest level in five years at the close of 2011, it had flattened out by the end of 2012’s second quarter. It dipped from a January high of 46.6 to a low score of 43.9 at the end of April.

In response to this news, NAHB’s Chief Economist David Crowe stated, “Even though many remodelers report that consumers are showing increased interest in remodeling, they are hesitant to act because of financing constraints and the spotty nature of the economic recovery, which so far has failed to reach some of the larger markets in country. Many consumers are likely to be deferring large remodeling projects until they feel more comfortable with the economic climate in their area.”

At American Financial Resources, we offer a variety of home financing solutions for eligible home buyers and homeowners including cash-out refinancing assistance and 203K loans which can be used to finance certain types of home renovations. You can learn more about AFR Mortgage and our current interest rates and home loan solutions by visiting us online at AFRMortgage.com.

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