The Remodeling Market Index (RMI) fell three points to 54 in the first quarter of 2019, according to the National Association of Home Builders. Despite the drop, the RMI is still over the index break-even point of 50, which indicates that more remodelers report that market activity is higher than report it is lower, compared to the previous quarter. The RMI has been above 50 since the second quarter of 2013 (Figure 1).
The overall RMI is an average of two sub-indices, an index measuring current market conditions and another measuring future market indicators. In the first quarter of 2019, the current market conditions index dipped four points to 53 (Figure 2). Among its major components, major additions and alterations fell seven points to 49, minor additions and alterations waned one point to 55, and the home maintenance and repair component decreased three points to 56.
The future market indicators index dropped two points to 54 in the first quarter of 2019 (Figure 3). Among its components, calls for bids fell by three points to 54, amount of work committed for the next three months increased two points to 54, the backlog of remodeling jobs fell five points to 54 and appointments for proposals remained unchanged at 55.
The remodeling market will continue to grow in 2019, but at a more modest pace than previously. The RMI is in line with NAHB’s remodeling forecast, which projects slower growth as there is declining home price appreciation and existing home sales volume, but rising construction costs.