US Remodeling Market Sentiment Declines in Q1

The National Association of Home Builders (NAHB)/Westlake Royal Remodeling Market Index (RMI) for Q1 was released Thursday, showing a reading of 63—down five points from 2024Q4. While the index remains in positive territory, this marks only the second time since 2020Q1 that the RMI has fallen to this level.

Tariffs and economic uncertainty were top concerns for consumers during the quarter. Although most of the RMI data were collected before the announcement of specific “reciprocal” tariffs, debate and uncertainty surrounding the issue already impacted consumer confidence. In response to special survey questions, remodelers reported that their suppliers have raised prices by an average of 6.9% since January 20, citing expectations of tariff-related cost increases.

Nevertheless, strong tailwinds—such as an aging population, an aging housing stock, post-COVID home equity gains, and “locked-in” existing homeowners—are expected to support solid remodeling spending for the foreseeable future, according to NAHB’s forecast.

The Remodeling Market Index (RMI) is an average of two component indices:

1. The Current Conditions Index is based on the average of three subcomponents: the current market for large remodeling projects ($50,000+), moderately sized projects ($20,000–49,999), and small projects (under $20,000). In Q1, the index averaged 71, down four points from the previous quarter. While the component for small projects held steady at 76, moderately sized projects edged down one point to 72 and large projects dropped 11 points to 64. Despite the declines, all three components remained above 50 in positive territory.
2. The Future Indicators Index is an average of two subcomponents: the current rate of leads and inquiries and the current backlog of remodeling projects. In Q1, the index averaged 55, a six-point drop from the previous quarter. Both subcomponents declined quarter-over-quarter: The backlog component edged down one point to 58, while the leads and inquiries component fell 11 points to 51.