Originally posted on NAHB’s Eye on Housing blog:
The Remodeling Market Index (RMI) dropped three points to 55 in the second quarter of 2017, according to the National Association of Home Builders (NAHB). Although the RMI posted a decrease, it has been at or above 50 for 17 consecutive quarters. A reading above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower.’
“The RMI has remained above 50 for the past four years, indicating strong demand for remodeling work,” says NAHB Chief Economist Robert Dietz. “However, the challenges posed by rising labor and material costs will constrain remodelers’ ability to increase production at a faster pace.”
The RMI is a composite measure of two sub-indices: the current market conditions and future market indicators. Similar to the overall RMI, the current market conditions index stood at 55. Among its components, major additions and alterations waned three points to 54; minor additions and alterations decreased six points to 53; and the home maintenance and repair components fell three points to 57.
The future market indicators index also posted a reading of 55. Among its components, calls for bids fell three points to 56; amount of work waned five points to 53; and the backlog of remodeling jobs dropped four points to 58. Meanwhile, appointments for proposals rose one point to 55.
Although market activity has been strong, remodelers face continuing challenges, particularly with the cost and availability of labor. In this quarter’s survey, 84 percent of respondents reported that the cost/availability of labor is one of the most significant challenges they face.
“While remodelers continue to see robust demand across the country, the lack of skilled labor continues to be a serious issue,” says NAHB Remodelers Chairman Dan Bawden, CAPS, GMB, CGR, CGP, a remodeler from Houston. “Remodelers are finding they have to decline projects because they can’t hire enough skilled staff to keep up with the demand.”
More information on the second quarter of 2017 RMI can be found here. Full RMI tables can be found here.