Fourth Quarter 2012 Highest RMI since Q1 2004
Remodeling Market Index shows reason for optimism
The Remodeling Market Index (RMI) reached 55 in the fourth quarter of 2012, increasing five points from the previous quarter, according to the National Association of Home Builders (NAHB). This is the highest reading since the first quarter 2004.
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.
“Remodelers are optimistic about the outlook for slow and steady market growth in the new year,” said 2013 NAHB Remodelers Chairman Bill Shaw, owner of Wililam Shaw & Associates in Houston. “Professional remodelers reported more work from large and small projects as well as overall home repair.”
Future market indicators increased from 49 in the previous quarter to 56. Current market conditions also showed improvement, rising from 52 in the previous quarter to 54. Remodelers indicated that activity was particularly strong in owner-occupied properties, rating all categories of remodeling in owner-occupied homes 56 or better.
“With existing home sales up, the increase in the RMI partially reflects the remodeling work new home owners undertake when they move in,” said NAHB Chief Economist David Crowe. “Consumers are gaining confidence in the economy and feeling more comfortable pulling the trigger on large and small renovations.”
The RMI was above 50 in all four regions of the country. The RMI in the Northeast surged 24 points, primarily due to the start of remodeling work related to Superstorm Sandy damage. —Remodeling staff
Remodelers’ Confidence Reaches Highest Point Since 2005
by Paul Emrath — Eye on Housing
NAHB’s Remodeling Market Index (RMI) climbed to 50 in the third quarter of 2012, up from 45 in the previous quarter. At 50, the RMI is at its highest point since the third quarter of 2005, tracking the positive trends recently seen in the rest of the housing sector.
The RMI measures professional remodelers’confidence in the market based on a quarterly survey that asks if various aspects of remodeling activity have gotten better or worse since the previous quarter.
The responses are aggregated into two major component indices. In the third quarter of 2012, the major RMI component on current market conditions rose from 46 to 52, while the future indicators component increased from 44 to 49. Each of the major RMI components is now higher than it has been at any time over the past six years.
Current remodeling activity was particularly strong in owner-occupied housing during the third quarter. The sub-components of the current conditions index for owner-occupied housing were all well over 50, ranging between 55 and 60.
Although additions and alterations over $25,000 also showed considerable strength in the third quarter, they continue to lag behind smaller property alterations and maintenance and repair jobs. The recovery of the remodeling market in general, and large projects in particular, is still facing constraints such as tight credit and problematic appraisals.
For more detail on all RMI components and subcomponents, along with their history, see NAHB’s RMI web page:http://www.nahb.org/reference_list.aspx?sectionID=136