Residential Real Estate News
U.S. Home Remodeling Industry Sentiment Declines in Early 2025
The National Association of Home Builders (NAHB) has released the first-quarter results of the NAHB/Westlake Royal Remodeling Market Index (RMI), showing a score of 63 -- a five-point drop from the previous quarter. While the index remains in positive territory, this marks only the second time since Q1 2020 that the RMI has dipped as low as 63.
The Current Conditions Index, a component of the RMI, reflects the average of three categories: the current market for large remodeling projects, medium-sized projects, and small-scale jobs. Meanwhile, the Future Indicators Index averages two metrics: the pace of incoming leads and inquiries, and the backlog of ongoing remodeling work. The overall RMI score is the average of both the Current Conditions and Future Indicators indices.
"Strong homeowner equity and limited housing options are still driving demand for remodeling, keeping overall sentiment positive," said NAHB Remodelers Chair Nicole Goolsby Morrison, N.C. "However, optimism has cooled somewhat since last quarter, with remodelers noting that uncertainty around tariffs and broader economic conditions is making clients hesitant about larger projects."
NAHB Chief Economist Robert Dietz added, "The five-point drop in the RMI likely reflects consumer caution amid rising costs and tariff concerns. Even though most of the Q1 data was collected before the announcement of specific reciprocal tariffs, the surrounding uncertainty has already affected consumer confidence. In fact, remodelers surveyed reported that suppliers have raised prices by an average of 6.9% since January, anticipating the impact of tariffs."
The RMI survey asks remodeling professionals to rate five key aspects of the market as "good," "fair," or "poor." Scores are presented on a scale of 0 to 100, with readings above 50 indicating that more respondents view conditions as good rather than poor. All results are seasonally adjusted.
Other U.S. Remodeling Industry Numbers Include:
- The Current Conditions Index fell four points to 71. All components remained above 50:
- Large projects ($50,000 or more): down 11 points to 64
- Moderate projects ($20,000-$49,999): down one point to 72
- Small projects (under $20,000): unchanged at 76
- The Future Indicators Index dropped six points to 55:
- Leads and inquiries: down 11 points to 51
- Backlog of jobs: down one point to 58
