Remodelers’ confidence remained solid in the second quarter of 2019 with a Remodeling Market Index (RMI) reading of 55, up one point from the previous quarter, according to the National Association of Home Builders (NAHB) (Figure 1). Readings above 50 indicate that more remodelers report market activity as higher than as lower, compared to the previous quarter.
The RMI is a composite of two sub-indices: one measuring current market conditions and another measuring future market indicators. The current market index stood at 55 in the second quarter of 2019, up two points from the previous quarter (Figure 2). Among its components, major additions and alterations rose four points to 53, while the minor additions and alterations, and the maintenance and repair components were flat at 55 and 56, respectively.
The future market indicators sub-index posted a reading of 55 in the second quarter of 2019, up one point from the previous quarter (Figure 3). Among its components, calls for bids remained unchanged at 54, while amount of work committed for the next three months fell two points to 52, the backlog of remodeling jobs increased four points to 58, and the appointments for proposals component was flat at 55.
The remodeling market is on solid footing, but has decelerated somewhat due to ongoing supply-side challenges, such as labor shortages and rising construction costs, as well as year-over-year weakness in existing home sales. Market conditions would be better if not for the rising costs making it difficult to complete some projects at prices homeowners can afford.