NAHB’s overall Remodeling Market Index (RMI) rebounded in the second quarter of 2013, bouncing back up to the post-2004 peak of 55 it reached at the end of 2012. An RMI above 50 indicates that more remodelers report market activity is higher than lower, compared to the previous quarter. After a long stretch below that break-even point, the RMI has been near or above 50 for four straight quarters.
The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity. In the second quarter, the current market conditions component increased from 50 to 54, while future market indicators increased from 48 to 56. All of the sub-components of future activity (calls for bids, work committed for three months, backlog, and appointments) were over 50 for the first time in eight years.
Some of the factors underlying remodelers’ positive outlook are rising home prices, which increase home owners’ equity and make it easier for them to finance remodeling projects, and additional momentum from existing home sales. Previous research published by NAHB has shown that buyers of existing homes spend about $2,000 more than usual on remodeling soon after moving in.