Weather Constrains Remodeling Market Index in the First Quarter

April 24, 2014

Against the backdrop of unusually severe winter weather, NAHB’s Remodeling Market Index (RMI) declined to 53 in the first quarter of 2014, from the historically high level of 57 in the two previous quarters. However, the RMI remains above the key break-even point of 50.  An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower.RMI 14Q1 chartThe overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.  In the first quarter of 2014, the index for current market conditions declined three points to 53.  The subindex for the current maintenance and repair component increased two points to 59, a historically high reading.

The index of indicators for future remodeling activity fell from 58 in the previous quarter to 52, but all four components remained at or above 50. Calls for bids was 52, the amount of work committed for the next three months was 50, the backlog of remodeling jobs was 55, and appointments for proposals was 52.

RMI 14Q1 table

Currently, factors like labor shortages and credit availability are constraining growth in residential remodeling and other segments of the housing industry. In the first months of 2014, activity was also affected by an uncommonly harsh winter. The two components of the RMI that declined the most in the first quarter, calls for bids and appointments for proposals, are the ones most likely to respond to weather conditions.

For more detail and a complete history of the RMI and its components, see NAHB’s RMI web page


NAHB’s Remodeling Market Index Rebounds in the Second Quarter

July 26, 2013

NAHB’s overall Remodeling Market Index (RMI) rebounded in the second quarter of 2013, bouncing back up to the post-2004 peak of 55 it reached at the end of 2012.  An RMI above 50 indicates that more remodelers report market activity is higher than lower, compared to the previous quarter.  After a long stretch below that break-even point, the RMI has been near or above 50 for four straight quarters.

RMI Q2 2013A

The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.  In the second quarter, the current market conditions component increased from 50 to 54, while future market indicators increased from 48 to 56.   All of the sub-components of future activity (calls for bids, work committed for three months, backlog, and appointments) were over 50 for the first time in eight years.

RMI Q2 2013B

Some of the factors underlying remodelers’ positive outlook are rising home prices, which increase home owners’ equity and make it easier for them to finance remodeling projects, and additional momentum from existing home sales.   Previous research published by NAHB has shown that buyers of existing homes spend about $2,000 more than usual on remodeling soon after moving in.