Remodeling Market Stability a Positive Sign for Housing

Builders who engage in home remodeling continue to display confidence in their market the National Association of Home Builders (NAHB) said today.  NAHB's Remodeling Market Index (RMI) rose from 56 in the second quarter of 2014 to 57 in the third quarter.

NAHB described the current index reading as a "high water mark" and said it was the sixth consecutive quarter that the reading has been above the benchmark of 50.  This indicates that more remodelers report a higher level of activity compared to the previous quarter than those who see activity as down. 

The RMI averages responses about current activity with those about future expectations for work.  Both current and future responses are based on calls for bids, amount of work committed for the next three months, backlog of jobs, and appointments for proposals.

"Most remodelers remain confident that the market is improving as home owners undertake renovations, large and small," said NAHB Remodelers Chair Paul Sullivan. "The consistency and longevity of positive RMI readings are in line with the gradual recovery of the housing industry."

The RMI's future market conditions index rose to 58 from 56 in the previous quarter. All measures - bids, commitments, backlogs, and appointments - remained level with the previous quarter's reading. 

The component measuring current activity increased one point but the categories of both large additions and smaller remodeling jobs each rose 2 points, to 56 and 58 respectively.

 "The stabilization of the RMI in the mid-50s for more than a year demonstrates the slow, steady recovery of the housing industry that we expect to continue," said NAHB Chief Economist David Crowe. "The major headwind to a stronger recovery is a shortage of qualified labor and subcontractors in some parts of the county, making it difficult for remodelers to employ carpenters and finish projects as quickly and economically as many of their customers expect."