Remodeling Market Index Higher to Close 2015
The National Association of Home Builders‘ (NAHB) Remodeling Market Index (RMI) posted a reading of 58 in the final quarter of 2015, one point above the previous quarter. This was consistent with similar results over the past year and a half, indicating sustained confidence in the market from remodelers.
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’ outlook on the market has been positive for the past three years,” said NAHB Remodelers Chair Robert Criner, GMR, GMB, CAPS, a remodeler from Newport News, Va. “Most importantly, the confidence has been continuous over this period. Professional remodelers have been hard at work rebuilding the sales pipeline during the past several years, and the RMI results are the proof that it’s paid off.”
The consistency with the previous quarter extended to all regions of the country. From the third quarter of 2015 results, the RMI was up two points to 66 in the Northeast, unchanged at 58 in the Midwest, up one point to 57 in the South and up two points to 63 in the West. At 59, the RMI’s future market conditions index gained a point from the previous quarter. Among its four components, calls for bids and backlog of jobs each rose one point from the previous quarter–to 58 and 61, respectively. Meanwhile, the amount of work committed and appointments for proposals each rose two points from the previous quarter’s readings–to 57 and 60, respectively.
The RMI’s current market conditions index stood at 56, unchanged from the previous quarter. Among its components, major additions and alterations, the slowest-recovering component, rose to 54 from 52 in the previous quarter. The smaller remodeling projects decreased one point to 56 and the home maintenance and repair component of the RMI remained at 58.
“The steady, performance of the RMI over the past six quarters is consistent with our projection for continued modest growth in remodeling spending,” said NAHB Chief Economist David Crowe. “Constraints to faster growth include labor shortages and home owners who are having trouble obtaining loans for larger projects.”