According to the National Association of Home Builders (NAHB) the remodeling industry has been increasingly impacted by the state of the national economy.  After hitting a four-year high of 46.5 in the first quarter of this year, NAHB's Remodeling Market Index (RMI)  dropped to 43.9 in the second quarter and, in third quarter data released on Thursday, is now at 41.7.  An RMI below 50 indicates that more remodelers report that market activity is declining than report that it is increasing.

"Remodelers report that while many consumers show interest in having remodeling work done, they are slow to commit to projects," said NAHB Remodelers Chairman Bob Peterson. "Consumers are in a 'wait and see' mode with regard to current economic conditions."

The overall RMI combines ratings of current remodeling activity with indicators of future activity.  In the third quarter, the RMI component measuring current market conditions fell to 43.0 from 44.8 in Quarter Two.  All three factors within that component also dropped; work on major additions decreased from 46.2 to 45.2; minor additions to 45.7 from 48.5, and maintenance and repair to 37.1 from 38.4.

The component measuring future indicators of remodeling business and its underlying factors declined as well.  The future indicator was down from 43.0 in the last quarter to 40.4 and calls for bids decreased from 49.8 to 45.4; the amount of work committed for the upcoming three months declined from 32.3 to 29.9; job backlog from 45.7 to 43.0, and appointments for appraisals to 43.3 from 44.2.

Regionally, current remodeling market conditions shrank in the Northeast to 43.9 (from 48.1 in the second quarter) and the West to 40.9 (from 48.2) while increasing in the Midwest at 46.8 (from 44.4) and the South at 47.1 (from 42.9). Future market indicators fell in all regions, except for the South, where it edged up to 42.2 from 41.6 in the second quarter.

"The current economic instability continues to affect consumer confidence, therefore we have seen a drop off in remodeling activity for the last two quarters," said NAHB Chief Economist David Crowe. "In order for the remodeling market to pick up, home owners need to have access to less restrictive lending requirements and see their economic future stabilizing."