NAHB’s Remodeling Market Index (RMI) rose three points to 56 in the second quarter of 2014; essentially reclaiming the territory it had lost during what was likely a weather-related dip in the first three months of the year.The RMI is based on a quarterly survey of NAHB remodelers, and is an average of separate indices for remodelers’ ratings of current market conditions and indicators of future remodeling activity. The components of current market conditions are major additions & alterations, minor additions & alterations, and maintenance and repair. Future indicators include calls for bids, amount of work committed for, backlog, and appointments for proposals.
Each RMI component is scaled so that a number above 50 means more remodelers reported market activity was higher (compared to the firest quarter) than reported it was lower. The overall RMI has now been above 50 for five consecutive quarters.
Two of the three current market RMI components improved in the second quarter, with a particularly strong increase in major additions & alterations (projects costing $25,000 or more). Maintenance and repair was essentially flat, edging down a point, but remains the strongest of the current conditions components. Meanwhile, each indicator of future activity improved in the second quarter, with three of the four indicators rising by a full 5 points.
Strength in the RMI and its components has likely been fueled in part by the recent improvement in the job market, as homeowners who feel more secure about their economic situation are more willing to undertake remodeling projects—especially larger, discretionary projects.
For more detail on the RMI and its components, including a complete history, see NAHB’s RMI web page.