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.
Q2 2021 Report Available Exclusively for Paid Subscribers
Pro Remodeling Segment Remains Healthy
While rising costs and extended lead times cause some consumers to defer projects until 2022, majority continue to move forward with large-scale home renovations. The competitive resale housing markets are pushing homeowners to renovate their existing homes rather than “move up.” The Q2 2021 US Remodeler Index rates a 74.2 out of 100, indicating the pro remodeling segment of the residential repair and remodeling industry expanded for the third consecutive quarter on a year-over-year basis.
The Q2 2021 index largely reflects growth in large-scale remodeling projects as well as an increase in the size of remodeler’s project pipelines (backlogs) in Q2 2021 across all professional remodeling segments.
4 big takeaways from our most recent report are:
- Larger-scale remodels are becoming “the norm.” 62% of remodelers say their average project size continues to increase as more consumers are opting for multi-room remodels. In addition to larger projects, 71% of remodelers who reported a shift in average price point say their clients are spending more, noting that consumers are increasingly understanding the long-term value of high-quality products and materials.
- Pipelines are bursting at the seams. Remodelers say they’re booked through 2021. Over 50% of remodelers across all industry segments report larger pipelines in 2Q21 vs. the same prior year period. With manufacturing lead times extending into spring 2022 and labor shortages at an all-time high, remodelers are purposefully extending their project timelines in an effort to meter work and catch up on growing backlogs.
- Some consumers are considering “hitting pause,” deferring projects to 2022. 53% of remodelers report client project cancellations or postponements in Q2 2021. Most remodelers note, however, that cancellations and postponements have been minimal, accounting for less than 10% of total pipelines, on average. Escalating prices and labor and product delays have caused some consumers to defer remodels until 2022.
- We expect double-digit revenue growth of 11% for FY 2021. Demand is bullish, fueling remodeler confidence in full-year 2021 revenue expectations. Remodelers urge manufacturers to minimize product lines and focus on reducing lead times for “hot ticket” items like high-end cabinetry and appliances. On average, remodelers expect revenues to grow +11% in 2021, which is slightly lower than Q1 2021’s forecast of 12% full-year revenue growth.
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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.