The National Association of Home Builders is reporting this week that their Remodeling Market Index posted a reading of 57 in the third quarter of 2017, up two points from the previous quarter.
For 18 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.
"Remodelers are seeing higher demand in residential repairs, and expect to be busy well into the new year with jumps in work backlog, call for bids and proposal appointments, likely due in part to the significant damage caused by hurricanes across the southern states," said NAHB Remodelers Chairman Dan Bawden, CAPS, GMB, CGR, CGP, a remodeler from Houston. "However, the ongoing labor shortage is constraining how quickly the repairs can be completed."
Remodelers are finding it more difficult to find skilled labor; over 90 percent of respondents stated that there is a shortage of finish carpenters. This is a significant increase from the third quarter of 2013, when only 44 percent of respondents reported a shortage of finish carpenters.
Current market conditions increased one point from the second quarter of 2017 to 56. Among its three major components, major additions and alterations waned one point to 53, minor additions and alterations increased three points to 56, and the home maintenance and repair component rose one point to 58.
The future market indicators index rose three points from the previous quarter to 58. Calls for bids increased two points to 58, amount of work rose three points to 56, the backlog of remodeling jobs gained two points to 60 and appointments for proposals increased four points to 59.
"In addition to the labor shortage, the cost of materials is becoming a pressing issue for remodelers," said NAHB Chief Economist Robert Dietz. "Both of these issues are constraining remodelers' ability to complete projects in a timely and cost-effective manner, especially moving forward after natural disasters."