Remodeling demand surges as more homeowners invest in their homes
More residential remodelers reported good market conditions in the third quarter, according to the National Association of Home Builders (NAHB).
NAHB's Remodeling Market Index (RMI) posted a reading of 82 in the third quarter, indicating a high demand for home improvement.
"With refinancing activity surging, homeowners are investing in their homes, which is sustaining strong demand for remodeling," said NAHB Remodelers Chair Tom Ashley. "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."
Remodelers also reported high levels of confidence in all types of projects in Q3 2020. NAHB's Current Conditions Index averaged 86, large remodeling projects ($50,000 or more) yielded a reading of 80, moderately-sized remodeling projects (at least $20,000 but less than $50,000) was at 86, and small remodeling projects (under $20,000) posted a reading of 90.
The Future Indicators Index also came in at 77, with the rate at which leads and inquiries posting a reading of 78 and the backlog of remodeling jobs averaging 77.
"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."