NAHB: Remodeling Market Sentiment Declined in the Second Quarter

The National Association of Home Builders (NAHB) announced its NAHB/Westlake Royal Remodeling Market Index (RMI) for the second quarter, which had a value of 68, a two-point decrease from the previous quarter.

Remodelers are asked to rank five aspects of the remodeling market as “good,” “fair,” or “poor” in the NAHB/Westlake Royal RMI survey.

Each question is scored on a scale of 0 to 100, with an index value greater than 50 indicating that a greater proportion of respondents consider conditions to be good rather than poor.

The Current Conditions Index is composed of three components: the current market for major renovation projects, medium-sized projects, and minor projects.

The Future Indicators Index is a weighted average of two components: the present rate of lead and inquiry generation and the existing backlog of remodeling projects.

Averaging the Current Conditions Index and the Future Indicators Index yields the overall RMI.

Any figure greater than 50 implies that more remodelers consider remodeling market conditions to be favorable rather than unfavorable.

The Current Conditions Index averaged 77, a two-point increase from the previous quarter.

Two of the three components increased as well: the component measuring major remodeling projects ($50,000 or more) climbed by one point to 72, while the component measuring minor remodeling projects ($20,000 or less) increased by four points to 81.

Meanwhile, the component assessing moderate-sized remodeling projects (at least $20,000 but less than $50,000) fell one point to 77.

In comparison to the previous quarter, the Future Indicators Index declined four points to 60.

The component indicating the current rate of lead and inquiry generation stayed constant at 59, while the component reflecting the backlog of remodeling jobs fell eight points to 61.

“Demand for remodeling is holding up despite higher prices and borrowing costs,” said Alan Archuleta, a remodeler from Morristown, New Jersey, is the NAHB Remodelers Chair.

“Customers have largely adjusted to the inflation and delays driven by supply-side challenges.”

“Remodeler sentiment remains positive even though the median price of a bath remodel has risen to $40,000 and the median price of a kitchen remodel to $75,000 as seen in NAHB’s latest survey,” NAHB Chief Economist Robert Dietz stated.

“The low inventory of homes on the market, aging housing stock, elevated work-from-home and growing equity owners have in their homes are continuing to support remodeling demand.”