NAHB Remodeling Market Index Hits 62 in Q3, Up One Point

The NAHB Remodeling Market Index (RMI) rose one point to 62 in the third quarter, the National Association of Home Builders reported on October 8 from Washington, DC. Any reading above 50 means more remodelers rate market conditions as good than poor, and the results are seasonally adjusted.

The index held its ground despite persistent headwinds. "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," said NAHB remodelers chair Elliott Pike, a remodeler from Homewood, Ala. "Remodelers also report that economic uncertainty is making some potential customers hesitant to move forward with projects."

What does the index measure?

The RMI survey asks remodelers to rate five components of the remodeling market as "good," "fair" or "poor," each on a scale from 0 to 100. Two indices feed the overall number:

• Current Conditions Index — an average of three components: large projects, moderately sized projects, and small projects.
• Future Indicators Index — an average of two components: the current rate of leads and inquiries, and the current backlog of remodeling projects.

The overall RMI is the average of these two indices.

How did the components perform?

The Current Conditions Index averaged 70 for the third consecutive quarter. All three of its components stayed well above 50:

• Large remodeling projects ($50,000 or more): up two points to 66.
• Moderate remodeling projects (at least $20,000 but less than $50,000): down two points to 71.
• Small remodeling projects (under $20,000): down one point to 73.

The Future Indicators Index averaged 54, up two points from the previous quarter. The leads-and-inquiries component rose two points to 53, while the backlog-of-jobs component increased two points to 56.

Why is labor the bottleneck?

NAHB Chief Economist Robert Dietz tied the reading to the association's broader forecast. "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," Dietz said.

He pointed to a strained labor picture: "Labor shortages, exacerbated by immigration enforcement and competition from data center construction, are extending the time it takes to complete projects."

Even so, Dietz flagged a structural shift in remodeling's favor: "Nevertheless, remodeling is gaining share in the overall construction market, as it is somewhat less sensitive than new construction to the current elevated interest rates."

That dynamic points to a market holding above the expansion threshold while project timelines stretch — a tradeoff remodelers and their clients will likely face into 2027.