By Melissa Dittmann Tracey, REALTOR® Magazine
More home owners are looking at sprucing up their homes, at least according to an index by the National Association of Home Builders, which shows its remodeling index reaching a five-year high during the fourth quarter of 2011.
“As more consumers remain in their homes rather than move in this economy, remodelers benefited from a gradual increase in home improvement activity, taking us to a five-year high,” NAHB Remodelers Chairman Bob Peterson said in a statement. “2011 ended on a strong note for the remodeling industry.”
The index measures current market conditions as well as future indicators for the remodeling business.
Overall, the index in the fourth quarter reached 46.6, a pick-up in activity compared to previous quarters but still below 50. A reading below 50 signifies that more remodelers are reporting lower market activity. Still, several key components measuring remodeling in the index were measuring above 50, a positive sign that business may finally be entering recovery mode.
“The residential remodeling market has been improving gradually, mirroring the trend in other segments of the housing market,” said David Crowe, NAHB chief economist. “Stringent lending requirements and economic uncertainty continue to be a drag on demand, but we expect a modest growth in remodeling activity to continue throughout 2012.”