The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) rose to 58 in the first quarter of 2017, an increase of five points from the fourth quarter of 2016 and the highest reading since 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.
“A milder than usual winter has led to increased remodeling activity and a positive outlook for spring,” said NAHB Remodelers Chairman Dan Bawden, CAPS, GMB, CGR, CGP, a remodeler from Houston. “Remodelers are seeing stronger market conditions with customers more willing to spend money on both small and large projects.”
Regaining strength from a three-point dip in the previous quarter, the current market conditions increased five points to 58. Among its three major components, all saw an increase from last quarter, with major additions and alterations up four points, demand for smaller remodeling projects increasing by seven points and the home maintenance and repair component rising six points.
The index measuring future market indicators also reached 58, meeting the highest point of 2016. Calls for bids rose significantly from 49 to 59, amount of work committed grew from 50 to 58, the backlog of remodeling jobs increased from 55 to 62, and appointments for proposals remained constant at 54.
“At 58, the Remodeling Market Index is seeing broad-based improvement with all major components well over 50,” said NAHB Chief Economist Robert Dietz. “However, remodelers will face challenges meeting the demand as the labor shortage continues and costs for materials, such as lumber, are rising.”