Remodelers are showing strong confidence in the market for projects of all sizes.
The National Association of Home Builders (NAHB) Remodeling Market Index (RMI) posted a reading of 82. On a scale of 0 to 100, a reading above 50 indicates that a higher share of professionals view conditions as good rather than poor.
The demand for home improvement is robust given the importance of home for Americans as the economy recovers and adapts from the impacts of COVID-19, the NAHB said.
“With refinancing activity surging, homeowners are investing in their homes, which is sustaining strong demand for remodeling,” said NAHB Remodelers Chair Tom Ashley, Jr., a remodeler from Denham Springs, La. “As a result of the rapid changes for work and the economy after the virus-induced recession, homes are serving multiple roles such as school, office and gym. This has directly increased the demand for improvements.”
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.
In the third quarter, all components and subcomponents of the RMI were 77 or above. The Current Conditions Index averaged 86, with large remodeling projects ($50,000 or more) yielding a reading of 80, moderately-sized remodeling projects (at least $20,000 but less than $50,000) at 86, and small remodeling projects (under $20,000) with a reading of 90.
These readings indicate that the strength for remodeling is felt across all types of projects, according to the NAHB.
The Future Indicators Index averaged 77, with the rate at which leads and inquiries are coming in at 78 and the backlog of remodeling jobs at 77.
Remodeling activity across the nation should maintain steady growth in 2021, according to the Leading Indicator of Remodeling Activity (LIRA) released on Oct. 15 by the Joint Center for Housing Studies (JCHS) of Harvard University.
“The third quarter RMI reading of 82 indicates strong remodeler sentiment, as business has strengthened as homeowners focus on the importance of home for work and life amidst the pandemic and its consequences,” said NAHB Chief Economist Robert Dietz. “However, remodelers are reporting double-digit percentage increases for material pricing, as delays in obtaining materials have become a critical near-term challenge due to disrupted supply chains. Nonetheless, the third quarter RMI is another indicator showing that housing is the bright spot of the economy.”
More information from the third quarter 2020 Remodeling Market Index is available here.