The National Association of Home Builder’s Remodeling Market Index (RMI) dropped four points to 54 in the first quarter of 2016 (Exhibit 1). Although the index posted a decline, it is still above the breakeven point of 50, which signals that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower.
Exhibit 1: Overall RMI
The overall RMI consists of two sub-indices: the current market conditions and future market indicators. This quarter, the current market conditions component of the RMI stayed about the same at a reading of 55 (down one point from the previous quarter) (Exhibit 2). Among its subcomponents, major additions & alterations increased one point to 55, minor additions & alterations dropped two points to 54, and maintenance & repairs declined by two points to 56.
Exhibit 2: Current Market Conditions
The future market indicators stood at 53, down from 59 in the previous quarter (Exhibit 3). Among its subcomponents, calls for bids dropped seven points to 51, amount of work committed for the next three months declined five points to 52, backlog of remodeling jobs dropped three points to 58, and appointments for proposals dropped eight points to 52.
Exhibit 3: Future Market Indicators
Although the overall RMI declined in the first quarter, the reading is still consistent with the NAHB projection of continued, modest growth in remodeling spending this year. Sharp fluctuations in financial markets in the first quarter may have impacted consumers’ readiness to commit to projects for the months ahead. To view this quarter’s RMI results in more detail, please visit the following: NAHB RMI webpage.