Remodelers' assessment of current market conditions for July through September climbed to 46.2, up from 44.8 in the second quarter, while lagging slightly behind the 47.8 recorded one year earlier. The expectations of remodelers declined from 44.6 to 43.3 between the second and third quarters and ran a hair behind the 45.4 registered during the third quarter of 2006.

"Buoyed by continuing strong demand for minor additions and alterations, the remodeling market is expected to end the year in pretty good shape," said NAHB Remodelers Chairman Mike Nagel, CGR, CAPS, a remodeler from Chicago. "Though down a bit from the previous quarter, the remodeling market is not experiencing the dip in production and sales being seen by the new home building sector of the industry."

The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number over 50 indicates that the majority of remodelers view market conditions as improving. The RMI has been running slightly below 50 since the final quarter of 2005.

Nationally, the index showed the market for minor additions and alterations improving significantly during the third quarter, from 43.27 to 47.07, while major additions and alterations remained stable at 46.89, up just a tad from 46.36 in the second quarter. Regionally, minor additions and alterations showed big gains in the Midwest, where they jumped from 45.06 to 57.44 on the RMI, and in the Northeast, where they rose from 50.43 to 56.68.

The amount of work committed for the next three months rose slightly on the index to 36.12, from 35.91, and the backlog of remodeling jobs decreased from 47.33 to 44.93. Additionally, the market for owner-occupied remodeling increased from 47.1 to 49.1 on the RMI, while renter-occupied remodeling declined from 40.2 to 38.7.

"The RMI is consistent with our forecasts for the remodeling market," said NAHB Chief Economist David Seiders. "We expect activity to contract in 2008, but to resume positive growth in 2009 and beyond."

In a special question on outdoor remodeling jobs, 52% of those responding on the RMI survey reported that their addition jobs included decks, followed by porches, 35%; patios, 25%; front porches, 25%; decking/patio covers/enclosures, 22%; outdoor lighting, 13%; and outdoor kitchens, 13%.

Thirty-one percent of respondents reported an increase in outdoor remodeling work compared to the previous year. And 44% responded that outdoor remodeling work had increased during the last five years.

RMI survey respondents said that 62% of customers financed outdoor remodeling projects with cash, with 36% using an equity line of credit.

The U.S. Census Bureau reported that $2.5 billion was spent last year on decks. It appears that customers tend to hire remodelers to add decks onto homes after living in the house for a period of time.

For more information about NAHB remodeling resources, e-mail Kelly Mack, or call her at 800-368-5242 x8451.