Remodeler confidence in the U.S. dipped in the second quarter as ongoing economic uncertainty and elevated interest rates tempered market momentum, according to new data released this week by the National Association of Home Builders (NAHB).
The NAHB/Westlake Royal Remodeling Market Index (RMI) declined to 59 in Q2, down four points from the previous quarter. While still above the key 50-point threshold that signals more remodelers view conditions as good than poor, it marks just the second time the index has fallen below 60 since the survey was overhauled in early 2020.
“Most remodelers continue to express positive sentiment, but some, especially in the western U.S., are reporting a slowdown in activity,” said NAHB Remodelers Chair Nicole Goolsby Morrison. “Those reporting a dip largely attribute it to economic uncertainty driven by government policies.”
The index, a composite of current market conditions and future indicators, reflects seasonally adjusted responses from professional remodelers who evaluate business conditions across five components. The Current Conditions Index, based on sentiment around large, moderate, and small-scale projects, fell five points to 66. Each segment remained in positive territory: large projects ($50,000 or more) slipped to 62, moderate projects ($20,000 to $50,000) declined to 66, and small projects (under $20,000) fell to 70.
Meanwhile, the Future Indicators Index, which tracks lead flow and project backlogs, fell to 51 from 55 last quarter. While lead volume held steady at 51, remodelers reported a notable pullback in backlogs, which dropped six points to 52.
“Remodeler sentiment softened in the second quarter, but overall it remains in positive territory,” said NAHB Chief Economist Robert Dietz. “Remodeling is facing headwinds from high interest rates and broader economic uncertainty, though to a lesser degree than new single-family construction.”
Despite the cooling sentiment, NAHB expects remodeling activity to rebound next year. “We project solid gains in 2025, with continued though more moderate growth in 2026,” Dietz added.
The latest data suggest the remodeling sector is holding relatively firm amid macroeconomic challenges, though emerging regional softness and shifting consumer sentiment may cloud the near-term outlook.
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