U.S. Remodeling Index Signals ‘Extended Cycle of Big-Project Spending’
authors Patrick O'Toole | June 1, 2021
IRVINE, Calif. and EVANSTON, Ill.—Very strong and getting stronger—that’s the latest quarterly reading from the U.S. Remodeling Index (USRI), a new gauge of business sentiment among home improvement and remodeling professionals nationwide. The index soared to 75.2, up from 63.5 in Q4 2020. All readings above 50 are positive.
A collaboration between John Burns Real Estate Consulting and Qualified Remodeler, a leading trade journal for remodelers, the USRI measures current activity, near-term activity and overall market hotness.
The Project (current) Activity Gauge surged to 72.7, up 15.6 points from 57.1 in Q4. The Near-Term (future) Activity Gauge rose to 76.9, up 7 points. These readings, along with other factors, generated a Remodeling Hotness Meter of 8 out of 10. This means that demand for remodeling services is higher today than it’s been in three years, the USRI report said.
“This data demonstrates compelling strength in remodeling and home improvement,” said Todd Tomalak, a principal with John Burns. “We believe we’re in the early stages of a long, extended cycle of big-project home improvement spending, which is reflected in the strength of professional remodeling post-COVID.”
Regional and Segment Gains
Conducted at the end of Q1 2021, the latest USRI was derived from survey responses from 476 remodelers in three business segments—full-service, design-build and home improvement. USRI sentiment measured 76.2 for full-service, 71.7 for design-build and a very bullish 77.3 for home improvement—specialty contractors focused on exterior and interior replacements.
The latest USRI readings translate to an 8 percent increase in project activity nationwide. Project volume grew in all regions of the country, particularly the Sunbelt where levels were up significantly year-over-year—up 4 percent in the Northwest; up 12 percent in the West excluding California, (which was up 1 percent); up 7 percent in the Midwest; up 9 percent in the South and up 7 percent in the Northeast and Mid-Atlantic. QR