Optimism Builds in Remodeling Market
WASHINGTON — The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a reading of 57 in the third quarter of 2016, an increase of four points from the previous quarter and also a return to levels seen consistently throughout 2015.
An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.
“Remodelers nationwide are seeing increased demand for major and minor addition jobs and calls for bids, leading to an increase in both current and future market indicators,” said 2016 NAHB Remodelers Chair Tim Shigley, CAPS, CGP, GMB, GMR, a remodeler from Wichita, Kan. “However, ongoing labor shortages continue to challenge their ability to meet the increased demand.”
The RMI’s current market conditions index rose to 56, up two points from the previous quarter. Among its components, major additions and alterations also gained two points, rising to 54. The component measuring demand for smaller remodeling projects increased by three points to 56 and the home maintenance and repair component rose by three points to 59.
Indicating optimism in market strength, the RMI’s future market indicators increased by five points from the previous quarter to 58. Among its four components, calls for bids and appointments for proposals both increased six points to 59 and 58, respectively, the backlog of remodeling jobs increased five points to 58 and the amount of work committed rose two points to 55.
“The Remodeling Market Index is consistent with NAHB’s forecast of gradual and steady improvements in residential remodeling activity,” said NAHB Chief Economist Robert Dietz. “This segment of our industry is being supported by rising home values and steady consumer confidence.”