The National Association of Home Builders/Westlake Royal Remodeling Market Index for the first quarter recorded a score of 86, flat compared to the first quarter of 2021. The result is a signal of home renovators’ confidence in their markets for projects of all sizes.
“Business remains strong for most remodelers in early 2022,” said Kurt Clason, chairman of NAHB Remodelers. “However, some are beginning to report that customers are reluctant to move forward with projects due to delays and higher costs caused by supply chain issues.”
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, with an index number above 50 indicating a higher proportion consider the conditions to be good or bad.
The current condition index is an average of three components: the current market for large remodeling projects, medium-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 conversion projects. The overall RMI is calculated by averaging the Current Conditions Index and the Future Indicators Index. Any number above 50 indicates that more rebuilders view the rebuild market conditions as good than bad.
The index of current conditions averaged 89 and remained unchanged compared to the first quarter of 2021. The component measuring large remodeling projects ($50,000 or more) rose four points to 89, while the component measuring medium-sized remodeling projects (at least $20,000 but less than $50,000) fell one point to 89, and the component measuring small remodeling projects (under $20,000) fell two points to 90.
The Future Indicators Index is down two points to 82 compared to the first quarter of 2021. The component that measures the current rate at which leads and inquiries are coming in fell six points to 80, while the component that measures the backlog of conversion orders rose two points to 84.
“An overall RMI of 86 indicates positive mood among rebuilders and is consistent with the NAHB forecast of moderate growth in the rebuild market for 2022,” said Robert Dietz, chief economist at NAHB. “Nevertheless, rising interest rates and high material costs are a considerable headwind for the renovation industry and the housing industry as a whole.”