Projections are down, but hopes are up. That in a nutshell is the assessment of the current state of the home building and remodeling industries as the books close on the first quarter of 2014.

Unusually harsh and prolonged winter weather in much of the country from January to March, along with economic instability, dampened the momentum that the home construction and remodeling industries built up during the second half of 2013, causing forecasters to revise their projections for the remainder of the year. Nonetheless, the arrival of spring has brought signs of new business and renewed optimism that 2014 will yet turn out well.

The National Association of Homebuilders (NAHB) reported earlier this month that its Leading Market Index (LMI) had ticked up only a hundredth of a point in March, from .87 to .88 (indicating the nationwide average is running at 88 percent of normal economic and housing activity). But the NAHB announced last week that new data from HUD and the U.S. Census Bureau showed single-family housing starts for March were up 6 percent.

"We see improving signs of new-home construction as we move into the spring buying season," NAHB chairman Kevin Kelly said. NAHB chief economist David Crowe stated the numbers affirmed the association's earlier forecast that the housing sector should gradually strengthen in the second and third quarters, provided that employment, the economy and the weather continue to improve.

Perhaps buoyed by that news, the NAHB's Housing Market Index (HMI) shows builder confidence up slightly in April, at 47 from a March reading of 46. That figure is still below the threshold of 50, which would indicate that overall perceptions of market conditions on average were good rather than fair. But the NAHB anticipates that builder confidence will continue to strengthen.

"As the spring home buying season gets into full swing and demand increases, builders are expecting sales prospects to improve in the months ahead,” Kelly said.

Sluggish home sales have taken their toll on the remodeling industry as well. The Remodeling Futures Program and the Joint Center for Housing Studies at Harvard has revised its Leading Indicator of Remodeling Activity (LIRA) forecast from earlier this year.

Going into 2014, the LIRA had indicated a strong first quarter for remodeling activity, but the slowdown in the housing market dampened those prospects. The revised forecast still projects solid growth in the industry this year, with some tapering off in the fourth quarter.

"As spending moves into the next phase, we expect to see recent double-digit growth tail off to its longer-term average in the mid-single-digit range," observed Kermit Baker, director of the Remodeling Futures Program at the Joint Center.

NAHB's Remodelers group issued a more cautious forecast during the International Builders Show (IBS) in February, predicting "slow and steady growth" in the next year or two. It calls for an increase of residential remodeling spending on owner-occupied single-family homes of 2.5 percent in 2014 over 2013, and another 1.8 percent in 2015, with kitchen and bath remodels leading the way.

Still, NAHB sees growth of any kind as a positive step for the industry. According to Remodelers chair Paul Sullivan, "Remodelers are regaining confidence in the market as home owners continue to upgrade their homes and make repairs or replacements that were deferred during tough times."

Echoing those sentiments, the National Association of the Remodeling Industry (NARI), in releasing the results of its Remodeling Business Pulse (RBP) data for the first quarter of 2014, reported that remodelers were "more optimistic" about the future as they head into the busy spring remodeling season, despite a drop in business conditions between December 2013 and March of this year, from 6.41 to 6.07.

Tom O'Gray, chair of NARI's strategic planning committee, stated that "homeowners remain slow to make the decision to move ahead with higher-priced projects," but comments on the Remodeling Business Pulse survey indicate "remodelers still feel this will be end up a strong year for business."

Remodelers are hoping that the spring weather will also thaw pent-up demand from homeowners who have long postponed needed repairs and upgrades in hopes that the economy and the housing market will show stronger improvement.