The NAHB Remodeling Market Index (RMI) posted a reading of 55 in the second quarter of 2017, down three points from the first quarter.
For 17 consecutive quarters, the RMI has been at or above 50, which 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.
“While remodelers continue to see robust demand across the country, the lack of skilled labor continues to be a serious issue,” said 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.”
An overwhelming majority of respondents — 84% — stated that the cost/availability of labor is the most significant challenge residential remodelers are currently facing.
At 55, current market conditions declined three points from the first quarter of 2017. Among its three major 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 component fell three points to 57.
The future market indicators index stood at 55, also slipping three points from the previous quarter. Calls for bids fell three points to 56, amount of work decreased five points to 53, and the backlog of remodeling jobs dropped four points to 58. Meanwhile, appointments for proposals rose one point to 55.
“The RMI has remained above 50 for the past four years, indicating strong demand for remodeling work,” said 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.”