Remodeling Market Index Declined Two Points to 68 in Q2
Washington, DC, July 14, 2023-The National Association of Home Builders (NAHB) released its NAHB/Westlake Royal Remodeling Market Index (RMI) for Q2, posting a reading of 68, edging down two points compared to the previous quarter.
The Current Conditions Index is an average of three components: the current market for large remodeling projects, moderately-sized projects and small projects. The Future Indicators Index is an average of two components: the current rate at which leads and inquiries are coming in and the current backlog of remodeling projects. The overall RMI is calculated by averaging the Current Conditions Index and the Future Indicators Index. Any number over 50 indicates that more remodelers view remodeling market conditions as good than poor.
The Current Conditions Index averaged 77, increasing two points compared the previous quarter. Two of the three components increased as well: the component measuring large remodeling projects ($50,000 or more) inched up one point to 72 and the component measuring small remodeling projects (under $20,000) rose by four points to 81. Meanwhile, the component measuring moderately-sized remodeling projects (at least $20,000 but less than $50,000) decreased by one point to 77.
The Future Indicators Index fell four points to 60 compared to the previous quarter. The component measuring the current rate at which leads and inquiries are coming in remained even at 59, and the component measuring the backlog of remodeling jobs dropped eight points to 61.
“Demand for remodeling is holding up despite higher prices and borrowing costs,” said NAHB remodelers chair Alan Archuleta, a remodeler from Morristown, New Jersey. “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,” said NAHB chief economist Robert Dietz. “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.”