The National Association of Home Builder’s Remodeling Market Index (RMI) dropped one point to 53 in the second quarter of 2016. Although the index dropped slightly, this quarter marks the 13th quarter in which the index is above the breakeven 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 (Figure 1).
Figure 1: Overall Remodeling Market Index
The overall RMI is comprised of two main sub-indexes that track current and future market conditions. The current market conditions sub-index dropped one point to 54 in the second quarter (Figure 2). Among its subcomponents, major additions and alterations dipped three points to 52, minor additions and alterations fell one point to 53, and maintenance and repair remained unchanged at 56.
Figure 2: Current Market Conditions
The future market conditions sub-index was unchanged from last quarter at 53 (Figure 3). Among its four subcomponents, calls for bids increased two points to 53, the amount of work committed rose one point to 53, and appointments for proposals stayed even at 52. Meanwhile, the backlog of remodeling jobs decreased five points to 53.
Figure 3: Future Market Conditions
Although the overall RMI dropped one point in the second quarter, the results are still consistent with the NAHB remodeling forecast, which predicts steady growth for 2016. For data tables on the RMI, visit www.nahb.org/rmi. For more information about remodeling, visit www.nahb.org/remodel.