Hardware Retailing The Industry's Source for Insights and Information
The National Association of Home Builders (NAHB) released its NAHB/Westlake Royal Remodeling Market Index (RMI) for Q1 2025, posting a reading of 63, down five points compared to the previous Q1 2025. Although 63 is still positive, this is the second time since the first quarter of 2020 that the RMI has been this low.
“Rising homeowner equity and limited opportunities to move into other homes is still supporting the home improvement market and keeping remodeler sentiment positive,” says Nicole Goolsby Morrison, NAHB remodelers chair and remodeler from Raleigh, North Carolina. “Sentiment is not quite as positive as it was last quarter, however, as some remodelers are reporting that uncertainty about tariffs and the direction of the economy are making customers hesitant to spend on larger projects.”
The NAHB/Westlake Royal RMI survey uses five components of the remodeling market as good, fair or poor. Each question is measured on a scale from 0 to 100, where an index number above 50 indicates that a higher share views conditions as good rather than poor.
- The Current Conditions Index is an average of three components, including the current market for large remodeling projects, moderately sized projects and small projects.
- The Future Indicators Index is an average of two components, measuring the current rate of leads and inquiries coming in and the current backlog of remodeling projects.
- The overall RMI is calculated by averaging the Current Conditions Index and the Future Indicators Index. Any number over 50 indicates that more remodelers view remodeling market conditions as good rather than poor.
“The five-point decline in the RMI likely reflects consumer uncertainty, fueled by rising costs and tariff concerns,” says Robert Dietz, NAHB chief economist. “Although almost all the data for the first quarter RMI were collected before the release of specific reciprocal tariffs, the debate and uncertainty over tariffs have affected consumer confidence. Indeed, remodelers responding to the RMI survey reported that their suppliers have already increased prices by an average of 6.9% since January, due to the anticipated effect of tariffs.”
The Current Conditions Index was 71, falling four points compared to Q1 2025. All three measurements remained above 50 in positive territory. The component measuring large remodeling projects $50,000 or more, fell 11 points to 64. The measurement for moderate remodeling projects, at least $20,000 but less than $50,000, fell one point to 72 and the component measuring small-sized remodeling projects, under $20,000, remained unchanged at 76.
The Future Indicators Index averaged 55, down six points compared to the previous quarter. The component measuring the current rate at which leads and inquiries are coming in fell 11 points to 51, and the component measuring the backlog of remodeling jobs fell one point, to 58.
