Remodeling Market Optimism Strengthens
The National Association of Home Builders (NAHB) released their third quarter indexes for 2016. One of the most notable increases was in the Remodeling Market Index (RMI), which measures current activity in the remodeling market while also providing indicators of the market’s future.
In the RMI, any rating above 50 is considered positive with more remodelers reporting higher activity. In 2016’s third quarter, the NAHB measured the Remodeling Market Index as 57. That is up four points from second quarter.
The RMI also measures specific components within the report, all of which showed positive gains in the third quarter. The current market conditions index rose two points to reach 56, while major additions and alterations also increased by two points, reaching 54. When it comes to smaller remodeling projects, that component showed an increase of three points to measure at 56. Last but not least, home maintenance and repair gained three points for a measurement of 59.
The RMI also measures future market indicators. In general, they rose five points from the second quarter. The third quarter index measures 58. There are four components within the future market index and they all showed improvement in the third quarter. The amount of work increased two points to 55. The backlog of remodeling jobs rose five points to 58. Two components increased by six points. They are calls for bids (59) and appointments for proposals (58).
2016 NAHB Remodelers Chair, Tim Shigley from Wichita, Kansas, is encouraged by the increased demand. However, he also notes the labor shortages as a hurdle to overcome. “Remodelers nationwide are seeing increased demand for major and minor addition jobs and calls for bids, leading to an increase in both current and future market indicators,” Shigley says. “However, ongoing labor shortages continue to challenge their ability to meet the increased demand.”
At QuickDraw Fund Control, we are certainly encouraged by these third quarter indexes. We’ve provided Fund Control and Inspection Services for many remodeling projects over the years, preparing construction budget analyses, preparing inspection reports and processing draw requests. Remodeling projects can be especially tricky because they rarely are completed on time and on budget. Issues almost always come up, which is why our role is so important. Lenders count on QuickDraw to protect their construction loans and provide the best disbursement recommendations.
Everyone at QuickDraw Fund Control is happy to see positive third quarter results from the NAHB’s Remodeling Market Index. We can’t wait to help more remodeling projects get off the ground this year and into 2017.