Despite recent trends of households staying in their current homes and remodeling rather than upgrading to larger properties, overall remodeling activity remained relatively flat during the first quarter of 2012.
The Remodelling Index fell one point, to 47 out of 100, during the three-month period, according to the National Association of Home Builders.
"We are seeing that the demand for remodeling work has been pulled forward because of a mild winter," said NAHB remodelers chairman George Moore Jr. "That is why many remodelers reported lower numbers for future activity."
Specifically, the report found that the number of major additions being made to homes remained unchanged, at 44 on the scale, while minor additions edged higher, to 52. In addition, real estate data found that major repair and maintenance projects took a four-point tumble to 51.
"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," said NAHB chief economist David Crowe. "Many consumers are likely to be deferring large remodeling projects until they feel more comfortable with the economic climate in their area."
Regionally, the West was the only area to report an increase in remodeling demand during the first quarter, as the index in this market rose three points, to 47. In contrast, activity in the Northeast declined to 48, while the Midwest and South fell to 50 and 46, respectively.
Meanwhile, as an indicator of future activity, the backlog of remodeling projects fell four points to 43, while appointments for remodeling proposals fell to 45.
This decline in prospective future remodeling activity could be an indicator that households could finally be gearing up to reenter the housing market to upgrade to new homes, rather than just build onto their current properties.
With the housing market entering its peak season for activity, the current relationship between property values, median household incomes and mortgage rates is providing potential buyers with the financial safety and soundness they need to pursue the prospect of purchasing a home.