The National Association of Home Builders' Remodeling Market Index posted a reading of 58 in the fourth quarter of 2019, up three points from the previous quarter. The RMI has been consistently above 50, indicating that more remodelers report market activity is higher compared to the prior quarter than report it is lower--since the second quarter of 2013.
"The low inventory of homes on the market is forcing people to stay in their homes, thus increasing the desire and demand to remodel," says Tim Ellis, NAHB Remodelers chair.
Current market conditions increased two points from the previous quarter to 56. Among its three major components, major additions and alterations gained four points to 56, minor additions and alterations increased by one point to 54 and the home maintenance and repair component rose one point to 58.
The future market indicators gained three points from the previous quarter to 60. Calls for bids increased by three to 58, amount of work committed for the next three months gained three points to 57, the backlog of remodeling jobs jumped five points 64 and appointments for proposals increased by two points to 62.
"The jump in the backlog of remodeling jobs is unsurprising due to several factors," says Robert Dietz, NAHB chief economist. "Demand for remodeling is high, supported by a strong overall economy and low interest rates, and it is challenging to meet the demand and work off a backlog quickly due to the ongoing shortage of skilled labor."
Beginning with the first quarter of 2020, the RMI will be redesigned and a new series will be released.