CONTINUED OPTIMISTIM REVEALED IN LATEST REMODELING MARKET INDEX (RMI)

On July 20, the NAHB released its Remodeling Market Index (RMI) for the second quarter of 2020, posting a reading of 73. The first quarter was only 48.

 

The Remodeling Market Index (RMI) is based on a quarterly survey of NAHB remodeler members that provides insight on current market conditions as well as future indicators for the remodeling market.

The RMI survey asks remodelers to rate five aspects of the remodeling market as "good," "fair" or "poor." Each question is measured on a scale from 0 to 100, where an index number of 50 indicates a higher share of remodelers view conditions as good rather than poor.

 

In the second quarter, all components and subcomponents of the RMI were well above 50.

“Many remodelers are busy, even busier than prior to COVID-19…their optimism for a stronger market is evident through their RMI responses.” said NAHB Remodelers Chair Tom Ashley, Jr., CAPS, CGP, CGR, a remodeler from Denham Springs, La.

Three key Indices are created from the survey results:

  1. Current Conditions Index - The current market conditions for large remodeling projects, moderately-sized projects, and small projects:

    • The Current Conditions Index averaged 77, including:

    • Large remodeling projects ($50,000 or more) yielding a reading of 70;

    • Moderately-sized remodeling projects (at least $20,000 but less than $50,000) at 78; 

    • Small remodeling projects (under $20,000) with a reading of 83.

  2. Future Indicator Index - The average of two components: the current rate at which leads and inquiries are coming in, and the current backlog of remodeling projects:

    • The Future Indicators Index averaged 70, including:

    • The rate at which leads and inquiries are coming in at 72; 

    • The backlog of remodeling jobs at 67.

  3. Overall Remodeling Market Index - calculated by averaging the Current Conditions Index and the Future Indicator Index. The current RMI of 73 indicates positive remodeler sentiment, especially when compared to 48 from the first quarter. 

In an effort to track quarterly trends, the redesigned RMI survey also asked remodelers to compare market conditions to three months earlier, using a “better,” “about the same,” or “worse” scale. This index posted a reading of 66, indicating that market conditions have improved substantially since the first quarter.

"A change index of 66 indicates that business has picked up since the previous quarter as homeowners focus on the importance of home for work and life amidst the pandemic,” said NAHB Chief Economist Robert Dietz. 

For the full RMI tables, including regional information, please visit nahb.org/rmi.