The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a record-high result of 60 in the final quarter of 2014. The reading level indicates remodelers’ confidence in the quarter-over-quarter improvement in the remodeling market.
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 recent pace and volume of business has been a boon to our remodeler members’ confidence in the recovery of the housing market,” NAHB Remodelers Chair Paul Sullivan, CAPS, CGR, CGP, of Waterville Valley, New Hampshire, said. “The upward trajectory of the RMI results over the past year has shown that home owners are ready, willing and deciding to remodel.”
According to the Demand Institute, one in three U.S. households plan to move in the five years. Americans will spend more than $7.4 trillion on home purchases and $2.2 trillion on rent as they seek better places to live. They will also spend more than $700 billion renovating their current homes.
The RMI’s future market conditions index rose to 60 from 58 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—increased from the previous quarter’s reading.
Last month NAHB reported its remodeling market Index (RMI) reclaimed the high-water mark of 57 in the third quarter, marking the sixth consecutive quarter for an RMI reading above 50. The current market conditions component of the RMI also increased to 60 from 57 in the previous quarter.
The readings for all subcomponents, including large additions and small remodels as well as maintenance and repair, also saw increases.
“Even with some weakness in existing homes sales and house prices earlier in the year, remodelers are upbeat as 2014 closes,” NAHB Chief Economist David Crowe, said. “The consistent improvement in RMI results throughout 2014 are a sign of the gradual recovery of the remodeling market.”
U.S. households are unhappy with their current living situations and they’re planning on doing something about it.