Home Remodeling Index in U.S. Hits Near Record High in Q4
The National Association of Home Builders reported this past week their NAHB Remodeling Market Index posted a reading of 60 in the fourth quarter of 2017, up three points from the previous quarter and only the second time since 2001 the reading has reached 60. For 19 consecutive quarters, the RMI has been at or above 50, which indicates that more remodelers report market activity is higher compared to the prior quarter than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.
"A booming stock market and low unemployment continue to fuel consumers' investment in their homes," said NAHB Remodelers Chair Joanne Theunissen, CGP, CGR, a remodeler from Mt. Pleasant, Mich. "Natural disaster-related repairs also caused strong demand for maintenance and repair projects."
Current market conditions increased four points from the third quarter of 2017 to 60. Among its three major components, major additions and alterations jumped seven points to 60, minor additions and alterations increased three points to 59, and the home maintenance and repair component rose three points to 61.
The future market indicators index rose one point from the previous quarter to 59. Calls for bids decreased two points to 56, amount of work committed for the next three months rose two points to 58, the backlog of remodeling jobs gained a significant six points to 66 and appointments for proposals fell two points to 57.
"At a high of 60, the RMI is consistent with the strong growth in home improvement spending in 2017," said NAHB Chief Economist Robert Dietz. "However, the surge in the backlog of remodeling jobs likely reflects supply-side challenges remodelers are facing in the form of skilled labor shortages and rising material prices."