The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) increased four points to 57 in the third quarter of 2016. This quarter’s reading marks a return to index levels seen consistently throughout 2015 (Figure 1). For fourteen consecutive quarters the RMI has been above the breakeven point of 50, which indicates more remodelers report market activity is higher (compared to the prior quarter) than report it is lower.
The overall RMI is an average of two main sub-indices, one that tracks current market conditions and another tracking future market conditions. The RMI’s current market conditions index rose to 56, up two points from the previous quarter (Figure 2). Among its subcomponents, major additions and alterations gained two points, rising to 54. The component measuring demand for smaller remodeling projects increased by three points to 56, and the home maintenance and repair component rose three points to 59.
Indicating market optimism among remodelers, the future market conditions index increased by five points from the previous quarter to 58 (Figure 3). Among its four subcomponents, calls for bids and appointments for proposals both increased six points to 59 and 58, respectively, the backlog of remodeling jobs increased five points to 58, and the amount of work committed rose two points to 55.
This quarter’s RMI reading is consistent with the NAHB 2016 RMI forecast, which predicts steady, gradual growth in the remodeling industry. For more information about the RMI, including detail tables of this quarter’s results, visit here.