The National Association of Home Builders reports that the remodeling sector continues to outperform other areas of the housing industry. The Remodeling Market Index (RMI) for the third quarter stood at 62, a one-point increase from the previous quarter, reflecting stable market sentiment.
The RMI has remained consistent, fluctuating between 59 and 70 over the past four years. This index measures remodelers’ perceptions of market conditions, with scores above 50 indicating more positive than negative views.
Robert Dietz, NAHB Chief Economist, stated, “The third quarter reading of 62 for the RMI is consistent with NAHB’s projection for remodeling activity to remain stable in 2026 and grow slightly in 2027.” He noted that labor shortages, partly due to immigration enforcement and competition from data center construction, are delaying project completions.
Despite these challenges, the remodeling sector is gaining market share in the construction industry. It is less affected by high interest rates compared to new construction.
The Current Conditions Index remained unchanged at 70 for the third consecutive quarter. Large remodeling projects ($50,000 or more) saw a two-point increase to 66, while moderately sized projects ($20,000 to $49,999) and small projects (under $20,000) decreased slightly.
NAHB Remodelers Chair Elliott Pike commented, “Remodeler sentiment remained stable in the third quarter, although remodelers in certain parts of the country continue to report issues with high material costs and finding enough labor to finish projects on time.” He added that economic uncertainty is making some customers hesitant to start projects.
The Future Indicators Index rose by two points to 54, with both the backlog of remodeling jobs and the rate of leads and inquiries increasing. This index reflects remodelers’ expectations for future market conditions.
The overall RMI, calculated by averaging the Current Conditions and Future Indicators indexes, remains above 50, indicating that more remodelers view market conditions favorably than unfavorably.