Confidence in the US remodeling market fell 17 points year-over-year on NAHB's index to a reading of 66 in Q4; remodeling activity projected to experience slowing nominal growth rate, but expected to outperform new residential construction: NAHB

Sample article from our Housing & Economy

WASHINGTON , January 19, 2023 (press release) –

The National Association of Home Builders (NAHB) released its NAHB/Westlake Royal Remodeling Market Index (RMI) for the fourth quarter, posting a reading of 66, declining 17 points compared to the fourth quarter of 2021.

“Remodelers on balance remain positive about the market, but we saw how inflation took a toll on consumer budgets, causing many to pull back on projects,” said NAHB Remodelers Chair Kurt Clason, a remodeler from Ossipee, N.H.

The NAHB/Westlake Royal RMI survey asks remodelers to rate five components of the remodeling market as “good,” “fair” or “poor”. Each question is measured on a scale from 0 to 100, where an index number above 50 indicates that a higher share view conditions as good than poor.

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 75, dropping 14 points compared the fourth quarter of 2021. All three components declined as well: the component measuring large remodeling projects ($50,000 or more) fell 14 points to 71, the component measuring moderately-sized remodeling projects (at least $20,000 but less than $50,000) dropped 13 points to 77 and the component measuring small remodeling projects (under $20,000) declined by 14 points to 77.

The Future Indicators Index fell 19 points to 58 compared to the fourth quarter of 2021. The component measuring the current rate at which leads and inquiries are coming in dropped 22 points to 52 and the component measuring the backlog of remodeling jobs decreased by 17 points to 63.

“Although the RMI was down sharply year-over-year, it is encouraging that it remains in positive territory,” said NAHB Chief Economist Robert Dietz. “NAHB expects remodeling activity to experience a slowing nominal growth rate, but to outperform new residential construction. Moreover, remodeling should start to pick up buy the end of 2023 as interest rates on home improvement loans begin to trend downward.”

The NAHB/Westlake Royal RMI was redesigned in 2020 to ease respondent burden and improve its ability to interpret and track industry trends. As a result, readings cannot be compared quarter to quarter until enough data are collected to seasonally adjust the series. To track quarterly trends, the redesigned RMI survey asks remodelers to compare market conditions to three months earlier, using a “better,” “about the same,” “worse” scale. Twenty-nine percent of remodelers said the market had gotten worse in the fourth quarter of 2022, compared to only 9 percent who said it had improved.

For the full RMI tables, please visit Opens A Pagehttp://www.nahb.org/rmi.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.

See our dashboard in action - schedule an demo
Chelsey Quick
Chelsey Quick
- VP Client Success -

We offer built-to-order housing & economy coverage for our clients. Contact us for a free consultation.

About Us

We deliver market news & information relevant to your business.

We monitor all your market drivers.

We aggregate, curate, filter and map your specific needs.

We deliver the right information to the right person at the right time.

Our Contacts

1990 S Bundy Dr. Suite #380,
Los Angeles, CA 90025

+1 (310) 553 0008

About Cookies On This Site

We collect data, including through use of cookies and similar technology ("cookies") that enchance the online experience. By clicking "I agree", you agree to our cookies, agree to bound by our Terms of Use, and acknowledge our Privacy Policy. For more information on our data practices and how to exercise your privacy rights, please see our Privacy Policy.