NAHB’s Remodeling Market Index (RMI) climbed to 50 in the third quarter of 2012, up from 45 in the previous quarter. At 50, the RMI is at its highest point since the third quarter of 2005, tracking the positive trends recently seen in the rest of the housing sector.
The RMI measures professional remodelers’confidence in the market based on a quarterly survey that asks if various aspects of remodeling activity have gotten better or worse since the previous quarter.
The responses are aggregated into two major component indices. In the third quarter of 2012, the major RMI component on current market conditions rose from 46 to 52, while the future indicators component increased from 44 to 49. Each of the major RMI components is now higher than it has been at any time over the past six years.
Current remodeling activity was particularly strong in owner-occupied housing during the third quarter. The sub-components of the current conditions index for owner-occupied housing were all well over 50, ranging between 55 and 60.
Although additions and alterations over $25,000 also showed considerable strength in the third quarter, they continue to lag behind smaller property alterations and maintenance and repair jobs. The recovery of the remodeling market in general, and large projects in particular, is still facing constraints such as tight credit and problematic appraisals.
For more detail on all RMI components and subcomponents, along with their history, see NAHB’s RMI web page: http://www.nahb.org/reference_list.aspx?sectionID=136