The National Association of Home Builders/Westlake Royal Remodeling Market Index (RMI) rose 1 point during the first quarter of 2023 for a reading of 70, but according to NAHB Eye on Housing, many challenges remain for remodelers in 2023. The remodeling sector is expected to experience steady growth in 2023, but at a slower pace than in 2022.
Continued material shortages and higher interest rates aren’t just discouraging prospective clients from taking on new projects, they’re also making it more difficult for remodelers to complete existing projects and tackle backlogs.
In the first quarter of 2023, the Current Conditions component index was 75, dropping 2 points from the fourth quarter of 2022. Quarter-over-Quarter, the two subcomponents decreased: large remodeling projects fell 3 points to 71 and small projects declined 2 points to 77; while moderately-sized remodeling projects remained unchanged at 78. Higher interest rates are having an effect on larger projects, with most of the homeowners who undertake large projects paying cash rather than financing them.