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Who Influences the Purchasing of Building Products?

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In a previous post, NAHB analyzed where builders and remodelers purchased products, regardless of who ultimately purchases them (themselves or subcontractors).  In this post, the question shifts to who is most often responsible for  the choice of particular products.

When averaging over all 24 building product categories, 60% of builders report they had the most influence on product selection compared to 49% of remodelers.  Still, these shares are ranked the highest within their respective sector.  Both builders and remodelers reported similar shares of influence for subcontractors, dealers & suppliers, and architects. 

However, when it comes to the greatest influencer being the customer, this is more prevalent among remodelers (26%) than among builders (16%).  When analyzing the top seven products most often chosen by the customer, there is a considerable gap between remodelers and builders.  Most of these products (cabinets, lighting, carpeting, ceramic tile, countertops, other flooring) typically are chosen for decorative qualities which are rated quite important among customers.

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Where Do Builders and Remodelers Buy Building Products?

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The most common sources for products used in home building and remodeling are specialty retailers, lumber yards, and wholesale distributors, according to two recent NAHB surveys. The surveys include one of single-family homebuilders in the October 2024 NAHB/Wells Fargo Housing Market Index (HMI) and one of remodelers in the Q3 2024 NAHB/Westlake Royal Remodeling Market Index (RMI). Both surveys asked respondents where they purchase building products, regardless of who ultimately purchases them (themselves or subcontractors)

When averaging across 24 building product categories, the top three major channels of distribution are roughly the same for both builders and remodelers. Specialty retailers, lumber yards, and wholesale distributors together account for around 70% of building product purchases.

When analyzing the specific products purchased at lumber yards, the top products purchased by both builders and remodelers were basic lumber products including plywood & OSB, sawn lumber, and engineered lumber & I-joists.

One major difference between builders and remodelers was the share of those who purchase products from home improvement centers.  Remodelers are three times as likely to buy products at this channel of distribution compared to builders.  Nevertheless, one specific product category, hand & power tools, is purchased at home improvement centers by a majority of both remodelers (68%) and builders (56%).  Of those that do purchase hand & power tools at home improvement centers, 11% of remodelers purchased at least one other product there compared to 3% of builders. 

A subsequent post on who is most often responsible for choosing these products will come later. Please click here to be redirected to the full report.

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Remodeling Market Sentiment Down in First Quarter

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Sentiment declined among remodelers in the first quarter of 2025, following a similar trend last month in single-family home builder sentiment. The NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 63 in the first quarter, down five points compared to the previous quarter. While this reading is still in positive territory, this is only the second time since the first quarter of 2020 that the RMI has been as low as 63.

Tariffs and economic uncertainty were top-of-mind for consumers this quarter. 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 has had an effect on consumer confidence.   Moreover, remodelers responding to the special questions as part of the RMI survey reported that their suppliers have already increased prices by an average of 6.9% since January 20, due to the anticipated effect of tariffs. 

Nevertheless, strong tailwind factors, such as an aging population, aging housing stock, home equity gains post-COVID, and “locked-in” (definition) existing homeowners, will continue to keep remodeling spending solid for the foreseeable future according to NAHB’s forecast.  

The RMI is based on a survey that asks remodelers to rate various aspects of the residential remodeling market “good”, “fair” or “poor.”  Responses from each question are converted to an index that lies on a scale from 0 to 100. An index number above 50 indicates a higher proportion of respondents view conditions as good rather than poor.

Current Conditions

The Remodeling Market Index (RMI) is an average of two major component indices: the Current Conditions Index and the Future Indicators Index. 

The Current Conditions Index is an average of three subcomponents: the current market for large remodeling projects ($50,000 or more), moderately sized projects ($20,000 to $49,999), and small projects (under $20,000).  In the first quarter of 2025, the Current Conditions Index averaged 71, dropping four points from the previous quarter.  While the component measuring small-sized projects remained unchanged at 76, moderately-sized remodeling projects inched down one point to 72 and large remodeling projects fell 11 points to 64. However, all three components remained above 50 in positive territory.

Future Indicators

The Future Indicators Index is an average of two subcomponents: the current rate at which leads and inquiries are coming in, and the current backlog of remodeling projects. 

In the first quarter of 2025, the Future Indicators Index averaged 55, down six points from the previous quarter. Both subcomponents experienced decreases quarter-over-quarter, with the component measuring the backlog of remodeling jobs inched down one point to 58 and the component measuring the current rate at which leads and inquiries are coming in fell 11 points to 51.

For the full set of RMI tables, including regional indices and a complete history for each RMI component, please visit NAHB’s RMI web page.

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In Home Improvement

10 Ways to Finance a Home Remodeling Project

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This article was originally published by a www.houzz.com . Read the Original article here. .

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10 Ways to Finance Your Home Remodeling Project

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Remodeling Market Sentiment Improves in Fourth Quarter of 2024

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The NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 68 for the fourth quarter of 2024, up five points compared to the previous quarter.

Remodelers are more optimistic about the market than they were earlier in the year, corroborated by NAHB’s recent analysis of home improvement loan applications.  Demand in many parts of the country was stronger than usual for the fall season, especially demand for larger projects, with leads coming in after the uncertainty about the November elections was removed.  Not only did the current conditions index for $50,000-plus projects show the greatest increase during the quarter, but the share of remodelers doing whole house remodeling reached a record high of 62%.  

The RMI is based on a survey that asks remodelers to rate various aspects of the residential remodeling market “good”, “fair” or “poor.”  Responses from each question are converted to an index that lies on a scale from 0 to 100. An index number above 50 indicates a higher proportion of respondents view conditions as good rather than poor.

Current Conditions

The Remodeling Market Index (RMI) is an average of two major component indices: the Current Conditions Index and the Future Indicators Index. 

The Current Conditions Index is an average of three subcomponents: the current market for large remodeling projects ($50,000 or more), moderately sized projects ($20,000 to $49,999), and small projects (under $20,000). In the fourth quarter of 2024, the Current Conditions Index averaged 75, increasing three points from the previous quarter.  All three components remained well above 50 in positive territory: large remodeling projects rose eight points to 75, moderate remodeling projects increased two points to 73, and small remodeling projects inched down one point to 76.

Future Indicators

The Future Indicators Index is an average of two subcomponents: the current rate at which leads and inquiries are coming in and the current backlog of remodeling projects. 

In the fourth quarter of 2024, the Future Indicators Index was 61, up six points from the previous quarter.  The component measuring the current rate at which leads and inquiries are coming jumped nine points to 62.  Meanwhile, the component measuring in the backlog of remodeling jobs rose two points to 59 quarter-over-quarter.

For the full set of RMI tables, including regional indices and a complete history for each RMI component, please visit NAHB’s RMI web page.

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In Home Improvement

10 Kitchen Remodeling Trends to Know About in 2025

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1. Larger Kitchens Borrow Space From Dining Rooms

While most homeowners (64%) keep their kitchen about the same size as the original during a remodel, more than a third (35%) increase the footprint. To gain more square footage, some homeowners steal space from a dining room (29%) or a living room (12%). Nearly 1 in 5 homeowners (18%) builds a home addition, while a smaller portion incorporate space from hallways (10%) and closets (7%).

After renovations, a majority of homeowners (53%) have a kitchen that measures 200 square feet or more, up 1 percentage point year over year. Midsize kitchens (100 to 199 square feet) account for 34%, while 13% of renovated kitchens are less than 100 square feet.

“Nearly half of the homes in the U.S. are 42 years old or older and were built to serve homeowners of a different era,” says Marine Sargsyan, Houzz staff economist. “As kitchens take on a more centralized role in daily activities, homeowners are choosing to surrender neighboring rooms and exterior spaces for additional kitchen square footage to meet their needs.”



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In Home Improvement

7 Remodeling ‘Uh-Oh’ Moments and How Pros Fixed Them

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Kirby Home DesignsSave Photo
1. Stain It Again

Designer: Kirby Foster Hurd of Kirby Home Designs

Location: Edmond, Oklahoma

Project. A new-construction spec home. “We collaborated with the builder, MassaRossa Luxury Homes, who allowed me full design creativity to create a space that would appeal to the masses,” designer Kirby Foster Hurd says.

“Uh-oh” moment. “The entirety of the kitchen cabinets are stain-grade maple wood,” Hurd says. “We created a custom stain by combining various stain colors together to get a light stain color. And we finished the cabinets with a matte finish.

“When I walked in to check in on the staining process, the cabinets were extremely dark. I had a panic moment for sure. We go through a very detailed process of stain samples on the same species of wood we are using in each particular project, so I was absolutely shocked when I saw the kitchen cabinets and how they were not representative of the prior stain sample I reviewed and approved. Unfortunately, the custom stain color had been matched incorrectly at the paint store.”

Solution. “Luckily, we work with very talented painters,” Hurd says. “They sanded the original cabinet color off and we started the whole process over again. Second time was a charm.”

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2023 Home Improvement Loan Applications: A State- and County-Level Analysis

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Residential improvement spending softened in 2023 due to elevated interest rates, high inflation, and sluggish home sales. According to the Bureau of Economic Analysis’ National Income and Product Accounts (NIPA), expenditures for residential home improvements rose 2% to $363 billion in 2023, from $356 billion in 2022. The 2% year-over-year (YOY) gain in 2023 marks the smallest YOY gain since 2011. This annual data indicates that the YOY gain in residential improvement spending slowed, but the remodeling market remained solid.

In this article, NAHB’s analysis of the 2023 Home Mortgage Disclosure Act (HMDA) data provides insight into remodeling activity in 2023 by age group, and by U.S. states and counties. The 2023 HMDA data, published by the Consumer Financial Protection Bureau (CFPB), covers detailed information on residential mortgage lending in 2023, including the type, purpose, and characteristics of home mortgage applications or purchased loans, and demographic and other information about loan applicants.

According to the 2023 HMDA data, the number of home improvement loan applications declined by 17% in 2023, compared to the previous year. Moreover, the total amount of home improvement loans was about 44 billion (24%) less than the total amount in 2022.

Age Group Analysis:

Figure 1 below presents the number of home improvement loan applications by applicants’ age from 2018 to 2023. Among all age groups, the number of home improvement loan applications surged in 2022 and declined in 2023. Compared to 2022, the number of home improvement loan applications decreased by 23% in 2023 for applicants aged between 25 and 34 and between 35 and 40. Applicants between the ages of 45 and 54 remained the largest age group to apply for home improvement loan applications, even though the number of loan applications for this age group reduced by 18% in 2023.

For applicants under 55 years old and above 74 years old, the number of loan applications in 2023 was higher than the pre-pandemic level in 2018 and 2019. Meanwhile, applicants aged between 55 and 74 had a lower number of loan applications in 2023 than in 2018 and 2019. As interest rates reached historically high levels in 2023, homeowners used savings to pay for home improvements, avoiding the extra expense of interest on loans.

State-Level Analysis:

While remodeling activity changed among different age groups, remodeling has also varied across geographic locations due to the cost of living, local economic conditions, and house prices.

With respect to total home improvement loan applications, California had the highest number of home improvement loan applications in 2023, with 118,649 applications. Florida came in second with 102,746 home improvement loan applications. Wyoming and Alaska had the lowest total numbers of home improvement loan applications with 1,312 and 1,358, respectively.

When we look at home improvement loan applications per 1,000 population, two states in New England, Rhode Island and New Hampshire, had the highest number of home improvement loan applications, with a rate of 6.4 and 6.0 applications per 1,000 population, respectively. Louisiana had the lowest number of home improvement loan applications, with a rate of 1.6 applications per 1,000 population.

In total, there were 3.7 loan applications for home improvements for every 1,000 population in the United States. California, the most populous state of the United States, reported 3.0 applications per 1,000 population, which is lower than the national average rate.

County-Level Analysis:

The analysis of county-level home improvement loan applications per 1,000 population reveals that the aggregate market population is not significantly related to the number of per capita home improvement loan applications. In 2023, the top 10 most populated counties in the United States had an average rate of 2.6 loan applications per 1,000 population. Los Angeles County in California, one of the most populous counties, reported a rate of 2.8 loan applications per 1,000 population in 2023.  Meanwhile, some counties with a lower population had a higher loan application rate (that is, the number of home improvement loan applications per 1,000 population). For example, Nantucket County in Massachusetts, with a population of about 14,000, had the highest loan application rate of 11.1 among all the counties in the United States. Camas County in Idaho, with roughly one thousand population, had a loan application rate of 8.9, higher than about 99.7% of the counties in the United States.

Additionally, the analysis finds that home improvement loan applications are relatively more common in the Mountain and New England Divisions. In total, there were 43 counties that reported 7 or higher home improvement loan applications per 1,000 population, and more than 72% of these counties were in the Mountain and New England Divisions. None of these 43 counties were in the West South Central, East South Central, or West North Central Divisions. The top five counties with the highest home improvement loan application rate were: Nantucket County (MA), Grand Isle County (VT), Dare County (NC), Boise County (ID), and Barnstable County (MA).

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Remodeling Market Sentiment Dips in Third Quarter

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The NAHB/Westlake Royal Remodeling Market Index (RMI) for the third quarter of 2024 posted a reading of 63, down two points compared to the previous quarter.

Remodelers remain optimistic about the market even though the overall RMI edged down for the third consecutive quarter. Some have potential customers citing the upcoming election as a reason for putting large projects on hold. Remodelers also continue to face various headwinds such as difficulty finding skilled construction labor and higher interest rates. Nevertheless, the overall RMI reading of 63 is consistent with NAHB’s forecast for steady 2% growth in remodeling spending over the next two years.

The RMI is based on a survey that asks remodelers to rate various aspects of the residential remodeling market “good”, “fair” or “poor.”  Responses from each question are converted to an index that lies on a scale from 0 to 100. An index number above 50 indicates a higher proportion of respondents view conditions as good rather than poor.

Current Conditions

The Remodeling Market Index (RMI) is an average of two major component indices: the Current Conditions Index and the Future Indicators Index. 

The Current Conditions Index is an average of three subcomponents: the current market for large remodeling projects ($50,000 or more), moderately sized projects ($20,000 to $49,999), and small projects (under $20,000). In the third quarter of 2024, the Current Conditions Index averaged 72, declining one point from the previous quarter.  All three components remained well above 50 in positive territory: the component measuring small-sized remodeling projects (under $20,000) rose two points to 77, while both the component measuring moderate remodeling projects (at least $20,000 but less than $50,000) and the component measuring large remodeling projects ($50,000 or more) fell three points to 71 and 67, respectively.

Future Indicators

The Future Indicators Index is an average of two subcomponents: the current rate at which leads and inquiries are coming in and the current backlog of remodeling projects. 

In the third quarter of 2024, the Future Indicators Index was 55, down three points from the previous quarter.  Quarter-over-quarter, the component measuring the backlog of remodeling jobs fell three points to 57 and the component measuring the current rate at which leads and inquiries are coming in dropped two points to 53.

For the full set of RMI tables, including regional indices and a complete history for each RMI component, please visit NAHB’s RMI web page.

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