The National Association of Home Builders (NAHB)/Westlake Royal Remodeling Market Index (RMI) was released today (7-14-22). The RMI posted a reading of 77 in Q2 of 2022, declining 10 points from Q2 of 2021. According to the NAHB, this is the largest year-over-year decrease since the survey was redesigned in Q1 of 2020.
The RMI is an average of two major component indices—the Current Conditions Index and the Future Indicators Index—and 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, where an index number above 50 indicates that a higher share view conditions as good rather than poor.
In Q2 of 2022, the Current Conditions component index was 83, falling 8 points compared to Q2 of 2021. Year-over-year, the subcomponent measuring large remodeling projects ($50,000 or more) experienced the largest decline (-11 points) to 79, compared to the subcomponent measuring moderately sized remodeling projects ($20,000 to $49,999) falling 7 points to 84 and the subcomponent measuring small remodeling ($20,000 or less) projects slipping by 6 points to 86.
The Future Indicators Index is an average of two subcomponents: the current rate at which leads and inquiries are coming in, as well as the current backlog of remodeling projects. In Q2 of 2022, the Future Indicators Index was 72, which fell 11 points from Q2 of 2021.
The NAHB does note, however, that an overall RMI of 77 still indicates positive remodeler sentiment. However, the decline suggests some weakness in the market which is consistent with the NAHB’s projection that residential remodeling spending, like new residential construction, will be down in 2022.
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