Remodeler confidence moves ahead in Q4
Despite supply chain delays and inflation, homeowner interest in remodeling remains strong, according to the National Association of Home Builders (NAHB).
The NAHB/Royal Building Products Remodeling Market Index (RMI) for the fourth quarter posted a reading of 83, up four points from the fourth quarter of 2020.
The finding is a signal of residential remodelers’ confidence in their markets, for projects of all sizes, the NAHB said.
“Higher home equity provided resources for homeowners to improve their existing homes, supporting high demand for remodeling,” said NAHB Remodelers Chair Steve Cunningham, a remodeler from Williamsburg, Va. “Many remodelers are completely booked well into the future, however, supply chain problems continue to delay projects and make it difficult to work off the backlog.”
The NAHB/Royal Building Products 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 views conditions as good than poor.
The Current Conditions Index averaged 89, a 4-point increase from the fourth quarter of 2020.
All components also posted increases compared to the fourth quarter of last year. Large remodeling projects ($50,000 or more) climbed seven points to 85, moderately-sized remodeling projects (at least $20,000 but less than $50,000) rose 2 points to 90 and small remodeling projects (under $20,000) increased 2 points to 91.
“The year-over-year increase in the RMI indicates ongoing strength in the remodeling market, although it is important to note the survey data were collected in late December and early January and do not fully capture recent increases in interest rates,” said NAHB Chief Economist Robert Dietz. “Going forward, NAHB expects remodeling activity to continue to grow in 2022, although not as fast as it did in 2021.”
The Future Indicators Index averaged 77, up 5 points from the fourth quarter of 2020. Both components increased as well: the current rate at which leads and inquiries are coming in rose three points to 74 and the backlog of remodeling jobs climbed increased seven points to 80.