CHICAGO--(BUSINESS WIRE)--Remodelers and home improvement professionals nationwide reported strong activity albeit with signs of slowing at the higher end of the market according to the latest U.S. Remodeler Index, a gauge of sentiment and remodeling activity conducted quarterly by Qualified Remodeler and John Burns Real Estate Consulting.
The most recent USRI release asked residential remodelers (July 8-22) about the strength of their businesses today and into the future. For the second quarter of 2022, the USRI rates a strong 65.7 where any reading over 50 is positive. The index fell from 67.7 one quarter earlier.
A full report from the John Burns team found four key takeaways.
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Homeowners are more hesitant to sign large, new remodeling contracts. | |
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- | Surging interest rates, shrinking retirement portfolios, and high inflation have squeezed even wealthy remodeling clients. |
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- | Remodelers report fewer inbound leads for large-scale projects and difficulty signing new project commitments. |
2. |
Manufacturers’ lead times are improving for some product categories, and remodeling timelines are stabilizing. | |
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- | Extended lead times remain the top reason for remodeling delays. |
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- | However, 60 percent of remodelers report improving lead times, 62 percent say projects are taking the same or less time to complete than the prior quarter. |
3. |
Customers are becoming more budget constrained and are pushing back on constant price increases. | |
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- | Remodelers report more customers cutting costs on projects to stay on budget. |
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- | Remodelers have successfully passed extreme inflation risk onto clients through higher markups, fuel surcharges, requotes of materials and other means. |
4. |
With an average project backlog of 5.2 months, remodelers expect revenue gains of 6 percent to 9 percent in 2022. | |
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- | Across the three remodeling segments average expected full-year revenue growth is good at 6 percent to 9 percent but is less than this time last year. |
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- | As remodelers work through backlogs, there is greater risk for falling demand for home improvement projects. |
“While healthy project backlogs continue to support remodeling activity, the USRI results confirm that higher interest rates and inflation are now impacting new project commitments,” said Eric Finnigan, vice president with John Burns.
Send questions about the report to Eric Finnigan at efinnigan@realestateconsulting.com. To learn more about Qualified Remodeler or other media brands at SOLA Group Inc., contact Paul Degrandis at paul@solabrands.com.