In last quarter’s Remodeling Market Index (RMI), remodelers across the country were asked to rate the reasons why customers want to remodel on a scale of 1=Never/Almost Never to 5=Very Often. The reason that received the highest average rating was ‘Desire for better/newer amenities’ (4.3), followed by ‘Need to repair/replace old components’ (4.2), and ‘Desire/need for more space’ (3.8) (Exhibit 1).
Exhibit 1: Average Rating of Reasons Why Costumers Remodel
The average ratings of the reasons for remodeling have been fairly consistent since the NAHB first asked the question in the RMI survey in 2012. However, some differences were observed this year in comparison to prior years.
For example, ‘Desire to be able to age in place’ changed from an average rating of 2.8 in the first quarter of 2012 to an average rating of 3.1 in the first quarter of 2016. Over that same time frame, the average rating for ‘Want to increase value of home as an investment’ increased from a 2.6 to 2.9, and the average rating for ‘Energy efficiency/environmental concerns’ decreased from a 2.7 to 2.4 (Exhibit 2).
Exhibit 2. Reasons for Remodeling by Average Rating – History
Statistical tests were performed on these three reasons to determine whether there were significant differences in the average ratings from the first quarter of 2012 to the first quarter of 2016. The tests indicated that the differences in the average ratings are significant.
Exhibits 3 and 4 provide alternative ways in which one can see the magnitude of the shifts over time. Based on the perspective of remodelers, their customers more often cite ‘desire to age in place’ and ‘want to increase value home as an investment’ as reasons to remodel (Exhibit 3).
Exhibit 3: Share of Remodelers Who Reported that Customer Often (4) or Very Often (5) Cite Desire to Age in Place and To Increase Value of Home as Investment as Remodeling Reasons
On the other hand, customers now less often cite ‘energy efficiency/environmental concerns’ as a remodeling reason (Exhibit 4).
Exhibit 4: Share of Remodelers Who Reported that Customers Never/Almost Never (1) Cite Energy Efficiency/Environmental Concerns as Remodel Reason
For more information regarding the RMI, please visit the following website: NAHB RMI webpage.