Remodelers' confidence in the market dipped in the first quarter of 2013 when the Remodeling Market Index (RMI) fell six points to 49, according to the National Association of Home Builders (NAHB). Concern about the rising costs of construction materials and labor contributed to the pause in the general upward trend of remodelers' confidence.

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. 

"Remodelers remain optimistic about the outlook for growth in the remodeling market this year, but the rising cost of doing business makes it difficult to deliver the prices that many of our customers expect," said 2013 NAHB Remodelers Chairman Bill Shaw, GMR, GMB, CGP, a remodeler from Houston. "Repairs and minor additions are currently the strongest categories of business for remodelers as home owners continue to invest in deferred maintenance and room-by-room remodeling."

The future market indicators component of the RMI decreased from 56 in the previous quarter to 48. Current market conditions also fell from 54 in the previous quarter to 50. Remodelers indicated that activity was particularly strong in owner-occupied properties, rating all categories of remodeling in owner-occupied homes 51 or better.

"Although this quarter's RMI indicates a pause in the improvement that the remodeling market had been showing, it is nevertheless the third highest reading for the RMI since the first quarter of 2006," said NAHB Chief Economist David Crowe. "Like the rest of the home building industry, remodelers are starting to feel squeezed by higher costs and limited availability of labor and materials, which is unusual at such an early stage of a housing recovery. However, the downturn was so deep and extended that this time it may take a while to re-establish the supply chains."

The RMI was 47 in the Northeast, 47 in the Midwest, 51 in the South and 52 in the West.

For more information about remodeling, visit www.nahb.org/remodel.