NAHB Reports Remodeling Index Results & Fall Construction Forecast

Washington, DC, October 23, 2015— The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a reading of 57 in the third quarter of 2015, two points below the previous quarter. However, this is the tenth straight quarter it has been 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.

The RMI was 64 in the Northeast, 58 in the Midwest, 56 in the South, and 61 in the West.

In addition, the NAHB also reports that steady employment and economic growth, pent-up demand, affordable home prices and attractive mortgage rates will keep the housing market on a gradual upward trend in 2016. However, persistent headwinds related to shortages and availability of lots and labor, along with rising materials prices are impeding a more robust recovery, according to economists who participated in the National Association of Home Builders (NAHB) Fall Construction Forecast Webinar.

“This recovery is all about jobs,” said NAHB chief economist David Crowe. “If people can get good jobs that pay decent incomes, the housing market will continue to move forward.”

The good news, Crowe added, is that total U.S. employment of 142 million is now well above the previous peak of 138 million that occurred in 2008.

The one caveat is that job growth has been concentrated heavily in the service sector, which tends to pay lower wages than goods producing jobs.

Meanwhile, home equity has nearly doubled since 2011 and now stands at $12.5 trillion.