Against the backdrop of unusually severe winter weather, the Remodeling Market Index (RMI) declined to 53 in the first quarter of 2014, according to the National Association of Home Builders (NAHB). This reading is down from the historically high level of 57 in the two most recent quarters, but remains above the key break-even point of 50.
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 remain confident in the continued growth of the home improvement market," said NAHB Remodelers Chair Paul Sullivan, CAPS, CGR, CGP, of Waterville Valley, N.H. "As we head into spring, the gradual rise in home equity levels will continue to help clients better afford to remodel their homes."
Smaller renovation jobs continue to show strength. The home maintenance and repair component of the RMI increased two points to 59 in the first quarter, a historically high reading. Overall, the current market conditions of the RMI declined three points to 53 this quarter.
While the RMI's future market conditions index fell from 58 in the previous quarter to 52, all of the four major components of the RMI's future market conditions index remained at or above 50 in the first quarter of 2014. Calls for bids was 52, the amount of work committed for the next three months was 50, the backlog of remodeling jobs was 55 and appointments for proposals was 52.
"An uncommonly harsh winter and continued labor shortage created a drag on many parts of the housing market, including remodeling, in the first months of 2014," said NAHB Chief Economist David Crowe. "The two components of the RMI that declined the most in the first quarter, calls for bids and appointments for proposals, are the ones most likely to respond to weather conditions. Going forward, we expect gradual but steady growth in the market for remodeling as there is still some pent-up demand from the housing downturn waiting to be released."
