The Remodeling Market Index (RMI) reached 55 in the fourth quarter of 2012, up five points from the third quarter of 2012, according to the National Association of Home Builders (NAHB). This is the highest reading since the first quarter 2004.
An RMI above 50 indicates that more remodelers report market activity is higher than the previous quarter than those reporting it is lower.
"Remodelers are optimistic about the outlook for slow and steady market growth in the new year," said 2013 NAHB Remodelers Chairman Bill Shaw, GMR, GMB, CGP, a remodeler from Houston. "Professional remodelers reported more work from large and small projects as well as overall home repair."
Future market indicators were up from 49 in 3Q 2012 to 56 in 4Q 2012.
Current market conditions were up from 52 in 3Q 2012 to 54 in 4Q 2012.
Remodelers saw activity as particularly strong in owner-occupied properties. Remodelers rated all categories of remodeling in owner-occupied homes at 56 or better.
"With existing home sales up, the increase in the RMI partially reflects the remodeling work new home owners undertake when they move in," said NAHB Chief Economist David Crowe. "Consumers are gaining confidence in the economy and feeling more comfortable pulling the trigger on large and small renovations."
The RMI was above 50 in all four regions of the country. In the Northeast, where remodeling work related to damage from Superstorm Sandy is commencing, the RMI was up 24 points in the fourth quarter.
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