US Remodeler Index (USRI)
An index of residential remodeling activity, the US Remodeler Index (USRI) offers key insights from the remodeling and home improvement market.
This quarterly index is the result of a unique partnership between one of the industry’s leading authorities on professional remodeling trends, Qualified Remodeler, and John Burns Real Estate Consulting. The USRI benchmarks current industry growth, near-term project demand and is an independent, frontline view into market trends, shifts, constraints, and underlying drivers of professional home repairs and remodels. The USRI is derived from surveys of presidents, owners, and managers of hundreds of remodeling firms in all 50 US states.
Overview of the US Remodeler Index
The USRI is a diffusion index reflecting weighted responses of remodeling companies on three aspects of market health: current growth, future growth, and the “hotness” of demand for professional remodels:
- Current growth (“Project Activity Gauge”) gauges project volume in the most recent quarter vs. prior year.
- Future growth (“Near Term Activity Gauge”) is an indicator of project volume growth in the upcoming quarter.
- Demand hotness (“Remodeling Hotness Meter”) reflects the overall sentiment of how strong consumer demand is for professionally completed home repairs, remodels, and improvements relative to the past three years.
“We’re excited to partner with Qualified Remodeler because these responses from their pro readership sheds much-needed light on the professional path to growth in remodeling. John Burns views pro big-project remodeling as one of the most exciting segments in the U.S. economy today,” said Todd Tomalak, JBREC Principal.
Q3 2021 Report Available Exclusively for Paid Subscribers
USRI Expands for the Fourth Consecutive Quarter
Project costs and overall lead times are a growing concern for both consumers and remodelers. Remodelers still report very healthy demand for whole-home renovation projects but note that the upcoming holiday season has caused a slight uptick in project deferment. Some remodelers note concerns around maintaining profit margins but are confident a shift in focus towards high-value projects will help mitigate any potential loss.
The Q3 2021 US Remodeler Index rates a 71.4 out of 100, indicating the professional remodeling segment of the residential repair and remodeling industry expanded for the fourth consecutive quarter on a year-over-year basis.
The Q3 2021 index largely reflects continued consumer appetite for high-value whole-home remodels, emphasizing functionality as consumers adopt a more home-centric lifestyle.
4 big takeaways from our most recent report are:
- Despite costs, project scopes continue to expand. Remodelers say inflationary pressure is highest on popular wood-based goods, such as cabinetry and decking. Despite the uptick in costs, consumers are still opting for large-scale home renovations. Over 60% of remodelers say average project size is larger in Q3 vs. Q2, noting most consumers are remodeling multiple areas of their house in the same project.
- Remodelers report timelines are slipping. Severe product delays are expected to persist into 2023. Over 70% of remodelers across all industry segments say projects are taking longer to complete vs. the same prior-year period, and 47% of remodelers indicate almost half of their current projects are behind schedule. Continuing product and labor shortages compound timeline issues and a growing number of remodelers expect these delays to persist into 2023.
- Product availability is a top concern. Brand is taking a backseat. Seventy-seven percent (77%) of remodelers say their top five sources of project delays stem from extended product lead times and lack of available labor. Remodelers and consumers are becoming more brand agnostic on products like appliances and cabinetry, as sheer availability begins to win out over brand preference.
- Remodelers are confident in double-digit average revenue growth of 10% for FY 2021. Although some consumers are electing to defer their projects into 2022, healthy project backlogs fuel remodeler confidence in full-year 2021 revenue growth of 10%, on average. Remodelers note that a decrease in product quality and escalating material costs are interfering with margins, but remaining supplier/vendor neutral and shifting focus to high-value projects has been favorable to their bottom line.
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About Qualified Remodeler and John Burns Real Estate Consulting
About Qualified Remodeler
Qualified Remodeler is the leading media brand serving the remodeling and home improvement industry trades. In print, online and in-person, Qualified Remodeler serves the business information needs of owners and executives with news, new products, business best practices and design ideas. Published 9 times each year, Qualified Remodeler offers a BPA audited circulation that delivers your message to 83,866* subscribers. Many thousands more subscribe to newsletters, and visit our websites each month.
The magazine is perhaps best known for its original Annual Top 500 List of the largest remodeling firms in the United States. It is also well known for its industry leading design award program, the Master Design Awards.
About John Burns Real Estate Consulting
John Burns Real Estate Consulting is an independent research provider and consulting firm focused on the housing industry. John Burns founded the company in 2001 because he saw a need for better analysis on the housing market. The company has grown to a highly passionate team of research analysts and consultants in offices across the country, who work together to provide the most trusted source of US housing analysis. John Burns Real Estate Consulting’s research subscribers receive the most accurate analysis possible to inform their macro investment decisions, and the company’s consulting clients receive specific property and portfolio investment advice designed to maximize profits.