The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a reading of 55 in the third quarter of 2019, unchanged from last quarter (Figure 1). Since the second quarter of 2013, the RMI has been above its breakeven point of 50, which indicates that more remodelers report market activity is higher than report it is lower, compared to the prior quarter.
The overall RMI is an average of two sub-indices, one measuring current remodeling activity and another measuring future indicators. The current market conditions index edged down one point to 54 from the previous quarter (Figure 2). Among its three major components, major additions and alterations dropped one point to 52, minor additions and alterations decreased by two points to 53 and the home maintenance and repair component rose one point to 57.
The future market indicators gained two points from the previous quarter to 57 (Figure 3). Calls for bids increased by one to 55, amount of work committed for the next three months gained two points to 54, the backlog of remodeling jobs increased one point to 59 and appointments for proposals jumped by five points to 60.
Demand for remodeling is solid and is supported by a healthy labor market and low interest rates. It is important to note that remodelers still face challenges, such as high costs and a lack of skilled labor.