The Remodeling Market Index (RMI) dropped one point to 57 in the fourth quarter, essentially unchanged from the third quarter (58), according to the National Association of Home Builders (Figure 1). Since the first quarter of 2013, the RMI has been at or above 50, which means that more remodelers report that market activity is higher than report that it is lower, compared to the previous quarter.
The overall RMI is an average of two indices that measure current market conditions and future market indicators. In the fourth quarter, the current market conditions index stood at 57, down one point from the previous quarter (Figure 2). Among its components, major additions and alterations remained steady at 56, while both the minor additions and alterations component and the maintenance and repairs component slipped one point to 56 and 59, respectively.
The future market indicators index fell three points to 56 in the fourth quarter (Figure 3). Calls for bids remained unchanged at 57, while amount of work committed for the next three months dropped seven points to 52, the backlog of remodeling jobs fell three points to 59 and appointments for proposals decreased four points to 55.
As indicated by the RMI, the remodeling market ended the year on a solid note. The market continues to benefit from strong employment growth and favorable demographics. However, it also faces ongoing supply-side challenges, such as labor shortages and high materials costs.