Remodelers Remain Confident, Despite Slow Improving Market
This week the National Association of Home Builders' Remodeling Market Index (RMI) posted a reading of 57 in the first quarter of 2015, off slightly from the historically high level of 60 in the last quarter of 2014, but above the key break-even point of 50.
An RMI above 50 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. The RMI was 59 in the Northeast, 54 in the Midwest, 56 in the South and 62 in the West.
"Remodelers remain positive about the gradual pace of market improvement, but that confidence was tempered by a severe winter and continued labor shortages," said NAHB Remodelers Chair Robert Criner, GMR, GMB, CAPS, a remodeler from Newport News, Va. "Clients continued to call for consultations for home remodeling jobs at the beginning of 2015."
Small renovation jobs continued to show strength. The home maintenance and repair component of the RMI increased four points to 64 in the first quarter, the highest reading on record. Overall, the current market conditions of the RMI declined two points to 58 this quarter.
The RMI's future market conditions index fell to 55 from 60 in the previous quarter. All four of its subcomponents--calls for bids, amount of work committed for the next three months, backlog of jobs and appointments for proposals--decreased slightly from the previous quarter's reading.
"Like the rest of the home building industry, remodelers are facing the pressure of increasing costs for labor and materials, but an RMI above 50 indicates that they still feel positive about the market on balance," said NAHB Chief Economist David Crowe. "The strength of the RMI's maintenance and repair component was likely due in part to the harsh weather conditions that struck many parts of the country during the first quarter and necessitated repairs."