Against the backdrop of unusually severe winter weather, NAHB’s Remodeling Market Index (RMI) declined to 53 in the first quarter of 2014, from the historically high level of 57 in the two previous quarters. However, the RMI remains above the key break-even point of 50. 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. In the first quarter of 2014, the index for current market conditions declined three points to 53. The subindex for the current maintenance and repair component increased two points to 59, a historically high reading.
The index of indicators for future remodeling activity fell from 58 in the previous quarter to 52, but all four components remained at or above 50. Calls for bids was 52, the amount of work committed for the next three months was 50, the backlog of remodeling jobs was 55, and appointments for proposals was 52.
Currently, factors like labor shortages and credit availability are constraining growth in residential remodeling and other segments of the housing industry. In the first months of 2014, activity was also affected by an uncommonly harsh winter. The two components of the RMI that declined the most in the first quarter, calls for bids and appointments for proposals, are the ones most likely to respond to weather conditions.
For more detail and a complete history of the RMI and its components, see NAHB’s RMI web page