As homebuilder sentiment begins to pick up in the newly constructed single-family home market in 2023, so does builder sentiment in the remodeling market.
National Association of Home Builders (NAHB)/Westlake Royal Remodeling Market Index According to data released on Thursday, the first quarter of 2023 is expected to increase by 70 points, one point higher than the fourth quarter of 2022.
“A composite RMI of 70 is consistent with NAHB’s projection that the remodeling market will grow in 2023, but at a slower pace than in 2022,” Robert Dietz, NAHB’s chief economist, said in a statement. “A potential area of growth given the aging US population is aging-in-place remodeling. In fact, 63% of remodelers reported doing aging-in-place work in the first quarter, including bathroom projects such as grab bars and Curb-less showers are especially common.
The index is based on a survey that asks remodelers to rate five components of the remodeling market as “good,” “fair” or “poor,” and each question is measured on a scale of 0 to 100. An index number above 50 indicates that a higher stock rates the situation as good rather than bad.
The Current Condition Index, which averages the scores of large remodeling projects ($50,000 or more), medium-sized projects (at least $20,000 but less than $50,000) and small projects (less than $20,000), was 75, two Issue dropped Q4 2022. The decrease was due to declines in both the major remodeling and minor remodeling components.
Regardless of their outlook on current conditions, remodelers are optimistic about the future. The Future Indicators Index, which is an overage of components that measure the current rate at which leads and inquiries are coming in, and the current backlog of remodeling projects, rose two points from the previous quarter to 64, as both components recorded Two point advantage respectively.
“Remodelers are generally optimistic about the home improvement market, although some are noting the negative effects of material shortages and higher interest rates,” NAHB Remodelers Chair Alan Archuleta said in a statement. “Clients are still working on large projects, but mostly paying cash rather than financing them.”
