NAHB’s Remodeling Market Index (RMI) was 57 in the third quarter—two points down from the previous quarter, but the tenth straight quarter it has been above the key break-even point of 50. The RMI and all its components lie on a scale of 0 to 100, where an index number above 50 means more remodelers report that activity has improved (compared to the prior quarter) than report activity has deteriorated.
The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity. The current market conditions index declined three points to 56 this quarter. Among its components, major additions and alterations, the slowest-recovering component, fell to 52 from 57 in the previous quarter. The smaller remodeling projects and home maintenance and repair components of the RMI decreased four and two points to 57 and 58, respectively.
At 58, the RMI’s future market conditions index was unchanged from the previous quarter. Among its four components, backlog of jobs rose to 60 from 58 while calls for bids and appointments for proposals—at 57 and 58, respectively— each dropped three points from the previous quarter’s readings. The amount of work committed for the next three months held steady from the previous quarter at 55.
An RMI that has stayed over 50 for ten straight quarters is an indication of the ongoing housing recovery. The increased backlog of remodeling jobs highlights the continuing labor shortages that hinder production, especially of large additions and alterations, and make it difficult to complete projects in a timely manner.