The NAHB/Westlake Royal Remodeling Market Index (RMI) for the first quarter of 2024 posted a reading of 66, down one point compared to the previous quarter.
Demand for remodeling remains solid and an RMI of 66 is consistent with NAHB’s forecast for remodeling spending in 2024. Nevertheless, construction costs are still an issue in some places, as rising prices for labor and building materials continue to be major headwinds to faster growth for this sector.
The RMI is based on a survey that asks remodelers to rate various aspects of the residential remodeling market “good”, “fair” or “poor.” Responses from each question are converted to an index that lies on a scale from 0 to 100. An index number above 50 indicates a higher proportion of respondents view conditions as good rather than poor.
The Remodeling Market Index (RMI) is an average of two major component indices: the Current Conditions Index and the Future Indicators Index.
The Current Conditions Index 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 of 2024, the Current Conditions Index averaged 74, remaining unchanged from the previous quarter. Quarter-over-quarter, the component measuring large remodeling projects ($50,000 or more) remained even at 70, the component measuring moderate remodeling projects (at least $20,000 but less than $50,000) dropped one point to 74, and the component measuring small-sized remodeling projects (under $20,000) also dropped one point to 77.
The Future Indicators 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 of 2024, the Future Indicators Index was 59, which was also unchanged from the previous quarter. Quarter-over-quarter, the component measuring the current rate at which leads and inquiries are coming in increased one point to 57, and conversely, the component measuring the backlog of remodeling jobs dropped one point to 61.
Please note that even though the Current Conditions and Future Indicators Indexes remained unchanged from the previous quarter, the reason why the Overall Index declined one point is simply due to rounding.
For the full set of RMI tables, including regional indices and a complete history for each RMI component, please visit NAHB’s RMI web page.
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