US Remodeling Sentiment Slips in Q2

On Thursday, the National Association of Home Builders (NAHB) reported that its Remodeling Market Index (RMI) fell one point to 61 in Q2. The index has remained consistently in the low 60s over the past year.

Despite the quarterly decline, remodeler sentiment continued to outperform sentiment in the single-family and multifamily housing sectors, NAHB said.

NAHB attributed the remodeling sector’s relative strength partly to the mortgage-rate lock-in effect. With current mortgage rates above the median outstanding rate for existing homeowners and existing-home inventory remaining limited, many owners are choosing to renovate rather than move. Record-high real estate gains have also given homeowners additional resources to finance remodeling projects.

However, economic uncertainty, inflation, and other cost pressures are delaying projects, particularly larger renovations. In the latest survey, 74% of remodelers said suppliers had raised material prices since March because of higher fuel costs, with an average increase of 6.7%.