NAHB says remodelers are busy and optimistic
The National Association of Home Builders (NAHB) second quarter 2020 Remodeling Market Index (RMI) posted a reading of 73, showing that most remodelers believe the market is on strong ground.
“Many remodelers are busy, even busier than prior to COVID-19,” said NAHB Remodelers Chair Tom Ashley, Jr., also a remodeler from Denham Springs, La. “Home owners are calling for decks, patios, porches, and kitchen and bathroom jobs.”
The Current Conditions Index averaged 77, including:
- large remodeling projects ($50,000 or more) yielding a reading of 70;
- moderately-sized remodeling projects (at least $20,000 but less than $50,000) at 78; and
- small remodeling projects (under $20,000) with a reading of 83.
The Future Indicators Index averaged 70, including:
- the rate at which leads and inquiries are coming in at 72; and
- the backlog of remodeling jobs at 67.
The new RMI survey asks remodelers to rate five facets 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 rather than poor.
The overall RMI is calculated by averaging the results of two components: the Current Conditions Index and the Future Indicator Index, each of which uses a similar scale from 0 to 100.
A redesigned RMI survey asks remodelers to compare market conditions to three months earlier, using a “better,” “about the same,” or “worse” scale.
This index posted a reading of 66, indicating that market conditions have improved substantially since the first quarter.
“An RMI of 73 indicates positive remodeler sentiment, and a change index of 66 indicates that business has picked up since the previous quarter as home owners focus on the importance of home for work and life amidst the pandemic,” said NAHB Chief Economist Robert Dietz. “However, rising material prices and ongoing skilled labor access represent ongoing supply-side challenges.”
This latest Remodeling Market Index shares the optimism of the residential construction industry with the NAHB’s latest Housing Market Index showing builder confidence rising to pre-pandemic levels.