Remodeler confidence was up strongly on a year-over-year basis, according to the Remodeling Market Index (RMI) released today by the National Association of Home Builders (NAHB). In the first quarter of 2021, the RMI posted a reading of 86, up a full 38 points from the first quarter of 2020. The large year-over-year increase signals a very strong recovery in remodeling activity since the onset of the pandemic.
The 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 view conditions as good than poor. There is not yet enough history of the current version of the RMI to seasonally adjust the series, so changes in the index should only be evaluated year over year.
The RMI is an average of two major component indices, measuring remodeler sentiment about current conditions and indicators of future activity. The Current Conditions Index, in turn, is an average of three subcomponents: the current market for large remodeling projects ($50,000 or more), moderately-sized projects ($20,000 to $49,999), and small projects (under $20,000).
In the first quarter, the Current Conditions Index was 89, a 31 point increase from the first quarter of 2020. Each of the current conditions subcomponent indices was well over 80: 85 for large, 90 for moderately-sized, and 92 for small remodeling projects. These readings were all up substantially year-over-year, indicating strong demand for remodeling across all types of projects.
The Future Indicator Index is an average of two subcomponents: the current rate at which leads and inquiries are coming in and the current backlog of remodeling projects. In the first quarter, the Future Indicator Index was 84, up 45 points from the first quarter of 2020. The subcomponent indices were 86 for the rate at which leads and inquiries are coming in, and 82 for the backlog of remodeling jobs. Again, both subcomponents were not only over 80, but up substantially year over year.
The large year-over-year increases in the RMI and all of its components signals a very strong recovery in remodeling activity since the onset of the pandemic. NAHB is projecting that remodeling activity will continue to grow into 2021 as the economy accelerates with an easing of the pandemic. However, prices and availability of building materials continue to be a challenge for remodelers and their customers.
For the full RMI tables, please visit NAHB’s RMI web page.