The National Association of Home Builders' Remodeling Market Index fell four points from the third to fourth quarters of 2016 but stayed in positive territory with a reading of 53, reflecting behavior seen in the first half of the year.
This marks the 15th-consecutive quarter that the index has been at or above the break-even mark of 50. A score above 50 suggests an increase in activity, while a score below indicates a contraction.
The RMI's current market conditions sub-index fell one point for major additions and alterations (53), four points for smaller remodeling projects (52) and five points for home maintenance and repairs. For future conditions, calls for bids fell to 49 while the proposal backlog declined three points (55) and work committed dropped by five points (50).
Despite overall optimism in the market heading into 2017, the latest index highlights the potential for a slowdown in demand for repair and remodeling services. Still, like the RMI’s leading figures, other reports of late have projected even growth.
The Leading Indicator of Remodeling Activity from Harvard’s Joint Center for Housing Studies recorded a 6.9% increase in remodeling spending during the fourth quarter of 2016 and is projecting similar quarterly increases throughout 2017 as rising home values push homeowners to invest in upgrades. However, the LIRA pulled back its spending projections for the next two years to 11.3% from its original forecast of 14.3%.
Still, constructions pros seem optimistic. A new report from Houzz noted that revenues are set to grow an average of 10 to 12% this year for a sample of home renovation and design companies that use its platform compared to 8 to 10% growth last year.
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