Within the second quarter of 2025, the NAHB/Westlake Royal Transforming Market Index (RMI) posted a studying of 59, down 4 factors in comparison with the earlier quarter. Whereas this studying continues to be in constructive territory, some remodelers, particularly within the West, are seeing a slowing of exercise of their markets. The second-quarter studying of 59 marks solely the second time the RMI has dipped under 60 for the reason that survey was revised within the first quarter of 2020.
Larger rates of interest and normal financial uncertainty have affected shopper confidence and are headwinds for transforming, however to not the extent that they’ve been for single-family development, as is clear in June’s destructive studying from the NAHB/Wells Fargo Housing Advertising and marketing Index (HMI). Because of this, NAHB continues to be forecasting strong positive aspects for transforming spending in 2025, adopted by extra modest, however nonetheless constructive, development in 2026.
The RMI is predicated on a survey that asks remodelers to charge varied features of the residential reworking market “good”, “honest” or “poor.” Responses from every query are transformed to an index that lies on a scale from 0 to 100. An index quantity above 50 signifies a better proportion of respondents view situations pretty much as good somewhat than poor.
Present Situations
The Transforming Market Index (RMI) is a median of two main part indices: the Present Situations Index and the Future Indicators Index.
The Present Situations Index is a median of three subcomponents: the present marketplace for giant reworking tasks ($50,000 or extra), reasonably sized tasks ($20,000 to $49,999), and small tasks (beneath $20,000). Within the second quarter of 2025, the Present Situations Index averaged 66, down 5 factors from the earlier quarter. All three parts decreased quarter-over-quarter, with each small and moderately-sized reworking tasks falling six factors to 70 and 66, respectively, whereas giant reworking tasks slipped two factors to 62. Nonetheless, all three parts remained above 50 in constructive territory.
Future Indicators
The Future Indicators Index is a median of two subcomponents: the present charge at which leads and inquiries are coming in, and the present backlog of reworking tasks.
Within the second quarter of 2025, the Future Indicators Index averaged 51, lowering 4 factors from the earlier quarter. Whereas the part measuring the present charge at which leads and inquiries are coming in remained unchanged at 51, the part measuring the backlog of reworking jobs fell six factors to 52. Just like the Present Situations parts, each stay above 50 in constructive territory.
For the total set of RMI tables, together with regional indices and a whole historical past for every RMI part, please go to NAHB’s RMI web web page.
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