However, future indicators weigh down on market sentiment
Remodeling sentiment remained relatively positive in the second quarter as strong demand buoyed the market despite higher prices and borrowing costs, according to the National Association of Home Builders (NAHB).
NAHB's Remodeling Market Index (RMI) posted a reading of 68 in Q2, down two points from Q1. The overall index remained positive, however, thanks to an increase in the current conditions index (the average of three components: the current market for large remodeling projects, moderately-sized projects, and small projects).
The current conditions index increased two points quarter over quarter to 77. Two of the three components also increased: the component measuring large remodeling projects ($50,000 or more) rose one point to 72, and the component measuring small remodeling projects (under $20,000) climbed by four points to 81. The component measuring moderately sized remodeling projects (at least $20,000 but less than $50,000) decreased by one point to 77.
However, the future indicators index dropped four points to 60 in the second quarter. The component measuring the current rate at which leads and inquiries are coming in held steady at 59, and the component measuring the backlog of remodeling jobs fell eight points to 61.
"Demand for remodeling is holding up despite higher prices and borrowing costs," said NAHB Remodelers chair Alan Archuleta. "Customers have largely adjusted to the inflation and delays driven by supply-side challenges."
"Remodeler sentiment remains positive even though the median price of a bath remodel has risen to $40,000 and the median price of a kitchen remodel to $75,000 as seen in NAHB's latest survey," said NAHB chief economist Robert Dietz. "The low inventory of homes on the market, aging housing stock, elevated work-from-home and growing equity owners have in their homes are continuing to support remodeling demand."
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