The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a reading of 53 in the fourth quarter of 2016, a decrease of four points from the previous quarter, but on par with levels seen in the first half of 2016. Remodeler confidence has held firm in positive territory for 15 straight quarters.
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.
“Many remodelers are seeing consumers commit to larger, long-term home improvement projects,” said 2017 NAHB Remodelers Chair Dan Bawden, CAPS, GMB, CGR, CGP, a remodeler from Houston. “As Americans are seeing wages and home values rise overall, it gives them greater confidence to go ahead and invest in their homes.”
Returning to levels seen early last year, the RMI’s current market conditions index dipped to 53, down three points from the previous quarter. Among its components, major additions and alterations waned one point to 53, demand for smaller remodeling projects decreased by four points to 52, and the home maintenance and repair component declined by five points to 54.
The index measuring future market indicators reached 52, about the same level as early 2016, but six points lower than in the third quarter. Among its four components, calls for bids and appointments for proposals fell to 49 and 54, respectively, the backlog of remodeling jobs dropped three points to 55, and the amount of work committed declined five points to 50.
“At 53, the Remodeling Market Index is consistent with NAHB’s forecast that remodeling market activity will continue to grow over the next two years, but at a more moderate annual rate of 1 to 2%,” said NAHB Chief Economist Robert Dietz.