Remodeling sentiment sagged in Q1 2025
The National Association of Home Builders (NAHB) has posted its NAHB/Westlake Royal Remodeling Market Index (RMI) for Q1 2025, and good news is sparse. Amid ongoing economic anxiety, the RMI registered 63, down five points compared to the previous quarter. While 63 is still in positive territory, according to NAHB, this is just the second time since the first quarter of 2020 that the RMI has been as low as 63.
The RMI survey gathers data by asking 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.
According to NAHB, 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 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.
“Rising homeowner equity and limited opportunities to move into other homes is still supporting the home improvement market and keeping remodeler sentiment positive,” said NAHB Remodelers Chair Nicole Goolsby Morrison, a remodeler from Raleigh, N.C. “Sentiment is not quite as positive as it was last quarter, however, as some remodelers are reporting that uncertainty about tariffs and the direction of the economy are making customers hesitant to spend on larger projects.”
“The five-point decline in the RMI likely reflects consumer uncertainty, fueled by rising costs and tariff concerns,” said NAHB Chief Economist Robert Dietz. “Although almost all the data for the first quarter RMI were collected before the release of specific reciprocal tariffs, the debate and uncertainty over tariffs has had an effect on consumer confidence. Indeed, remodelers responding to the RMI survey reported that their suppliers have already increased prices by an average of 6.9 percent since January, due to the anticipated effect of tariffs.”
NAHB shares more data from its most recent findings. Its Current Conditions Index averaged 71, dropping four points compared to the previous quarter. All three components remained above 50: the component measuring large remodeling projects ($50,000 or more) fell 11 points to 64, the component measuring moderate remodeling projects (at least $20,000 but less than $50,000) dipped one point to 72, and the component measuring small-sized remodeling projects (under $20,000) remained unchanged at 76.
The Future Indicators Index averaged 55, down six points compared to the previous quarter. The component measuring the current rate at which leads and inquiries are coming in fell 11 points to 51, and the component measuring the backlog of remodeling jobs dipped one point to 58.
Click here for NAHB's full dataset.
