The National Association of Home Builders’ (NAHB) redesigned the Remodeling Market Index (RMI) in the first quarter of 2020 in order to ease respondent burden and improve its ability to interpret and track industry trends. The first reading for this new RMI series was 48.
The RMI survey now 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 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 Indicator 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.
Current Conditions Index stood at 58, with large remodeling projects ($50,000 or more) yielding a reading of 53, moderately-sized remodeling projects (at least $20,000 but less than $50,000) at 59, and small remodeling projects (under $20,000) with a reading of 62.
Meanwhile, the Future Market Indicators Index stood at 39 in the first quarter of 2020, with the rate at which leads and inquiries coming in at 30 and the backlog of remodeling jobs at 47.
A separate index is created for the final question in the survey: How does the overall market for remodeling in the area where you operate compare to three months ago? This index is also measured on a scale of 0 to 100, where any reading over 50 indicates a higher share of remodelers report conditions as better than worse compared to the previous quarter.
This index stood at 24 in the first quarter of 2020. The low reading is directly related to the impact of the novel coronavirus, COVID-19. The onset of the virus has led to deteriorating economic conditions in the US and in the remodeling industry.