NAHB Remodeling Market Index Increases in the Fourth Quarter

NAHB’s Remodeling Market Index (RMI) for the fourth quarter of 2011 increased to 46.6 from 41.7 in the third quarter.   At 46.6, the overall RMI is now as close to the break-even point of 50 as it has been since 2006.  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 is an average of two major sub-indices, both of which increased in the fourth quarter.  The sub-index based on remodelers’ perception of current market conditions rose to 48.4 from 43.0 in the previous quarter. The sub-index based on future indicators of remodeling business increased to 44.8 from 40.4.

Several components of  the sub-indices broke above 50 in the fourth quarter.   Among the components of current conditions, major additions increased to 52.3 (from 45.2) and minor additions increased to 50.1 (from 45.7).   Among the indicators of future activity, calls for bids increased to 50.7 (from 45.4) and appointments for proposals increased to 50.1 (from 43.3).

With a number of key components above 50, the RMI provides reason for guarded optimism about the market for residential remodeling going forward, although factors such as stringent lending requirements and economic uncertainty continue to be obstacles to further growth.

For more detail and history, see NAHB’s RMI web page: