The RMI is based on a quarterly survey of about 2,000 residential remodelers nationwide. The RMI is created by averaging two separate component indices - the Current Market Conditions index and the Future Market Indicators Index. Both indices encompass ratings for owner as well as rental-occupied housing. The Current Market Index is based on remodelers’ responses to the market demand for remodeling at the present time compared to three months earlier (higher, about the same or lower) for major additions and alterations ($25,000 or more), minor additions and alterations (less than $25,000), and maintenance and repairs. The Future Market Indicators index is based on responses to: volume of calls for bids, the amount of work committed for the next three months (higher, about the same or lower), the backlog of remodeling jobs, and the number of proposal appointments at this time compared to three months earlier.
To produce the indices, the ratings for owner and renter-occupied properties were pooled by weighting the ratings by the average share of remodeling activity for owner and rental properties from 1995 to 1999. The average share of remodeling activity during this period was 69% in owner-occupied properties and 31% for rental properties. The share of major additions and alterations, minor additions and alterations and maintenance and repair were also estimated for the same period.
The two indices that make up the RMI are calculated as follows:
The Current Market Conditions index is based on three indices: Major Additions and Alterations of $25,000+ with a weight of 0.30; Minor Additions And Alterations of less than $25,000 with a weight of 0.40; and Maintenance and Repairs with a weight of 0.30.
The Future Market Indicators index is based on four indices: Call For Bids, Amount of Work Committed For The Next 3 Months, Backlog of Remodeling Jobs, and Appointments for Proposal. Each index receives an equal weight of 25%.
Any number over 50 indicates that more remodelers view remodeling conditions as higher than the previous quarter. Results are seasonally adjusted.