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Remodeling Market Sentiment Edges Down but Remains Positive in First Quarter – Eye On

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In the first quarter of 2026, the NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 62, down two points compared to the previous quarter. Despite this decline, the overall reading has been solidly in positive territory since Q1 2020.

Remodeler sentiment remained generally positive in the first quarter, even as many remodelers are still working to manage their customers’ cost expectations. Only a relatively small share report homeowners putting projects on hold due to economic and political uncertainty.

Ongoing positive remodeler sentiment is consistent with NAHB’s outlook, given an aging housing stock and the lock-in effect of elevated mortgage rates keeping owners in the homes longer. In the first quarter, remodelers reported 21% of their projects were associated with home improvements made shortly after a purchase, while only 4% were for homeowners’ projected to ready a home for sale.

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 components: 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 2026, the Current Conditions Index averaged 70, edging down one point from the previous quarter. All three components remained well above 50 in positive territory. The component measuring small remodeling projects was the only one to experience a quarterly gain, inching up one point to 74. Both the moderate and large remodeling projects components were down two points to 69 and 67, respectively.

Future Indicators

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

In the first quarter of 2026, the Future Indicators Index averaged 54, down two points from the previous quarter. Both components decreased quarter-over-quarter but are above the break-even point of 50. The component measuring the current rate at which leads and inquiries are coming in edged down one point to 53, while the component measuring backlog of remodeling jobs dropped three points to 58.

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.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Remodelers Saw Profit Margin Gains in 2024 – Eye On Housing

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Profitability for residential remodelers reached its highest level in more than two decades in 2024. Industry-wide profit benchmarks are important because they allow companies to evaluate their financial performance in context with the industry. Doing so can guide resource allocation, budgeting, and target setting for costs and expense lines, leading to a more successful business strategy. This post summarizes the results from NAHB’s most recent edition of the Remodelers’ Cost of Doing Business Study.

On average, residential remodelers reported $2.7 million in total revenue for fiscal year 2024. Of that, about $1.9 million (70.1%) was spent on cost of sales (i.e., labor, materials, contractors), which translates into an average gross profit margin of 29.9%. Operating expenses (i.e., indirect construction costs, finance, S&M, G&A, and owner’s compensation) cost remodelers an average of $646,000 (23.6% of revenue), leaving them with an average net profit margin of 6.3%. 

Remodelers’ 29.9% average gross profit margin in 2024 was a solid five percentage points higher than in 2021, when the metric sank to a record low of 24.9%. The improvement was due in large part to a significant reduction in trade contractor costs, which dropped from 36% of revenue in 2021 to 30% in 2024. The average gross margin in 2024 (29.9%) marked a return to gross profitability levels at par with 2018 (30.1%).

Successfully reducing their costs of sales improved remodelers’ bottom line. In 2024, their average net profit margin (6.3%) was higher than in 2021 (4.7%) and 2018 (5.2%). It was also the highest net margin reported by remodelers since 1996 (6.8%).

The Cost of Doing Business Study also tracks residential remodelers’ balance sheets. On average, they reported $668,000 in total assets on their 2024 balance sheets. Of that, $331,000 (50%) was financed by liabilities (either short- or long-term) and the other $337,000 (50%) by equity builders held in their companies.

Historical data show remodelers’ balance sheets expanded significantly in 2024, with average total assets ($668,000) up 34% compared to 2021 ($497,000). But perhaps more important than fluctuations in the nominal size of their balance sheets, the data clearly point to remodelers deleveraging their businesses in the last decade. In 2015, 68% of remodelers’ assets were financed through debt. By 2021, that share was down to 49%, where it remained essentially unchanged in 2024 (50%). Logically, the latter means remodelers are using more of their own capital to run their companies, as illustrated by their equity share rising from 33% in 2015 to 50% in 2024.

More specific data about remodelers’ various cost of sales lines (e.g., the share of revenue spent on materials), operating expenses (e.g., how much owners were paid as compensation), or types of assets (e.g., cash) are available in the official publication of the 2026 Remodelers’ Cost of Doing Business Study.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Rising Rates Weigh on Mortgage Activity – Eye On Housing

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Mortgage application activity decreased month-over-month as the 30-year fixed mortgage rate rose. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, declined 4.3% from February on a seasonally adjusted basis but remained 30.8% higher than a year earlier. Applications for adjustable-rate mortgages (ARM) also decreased 4.5% month-over-month, while their share of total applications was unchanged at 8.3%.

The average contract rate for a 30-year fixed-rate mortgage increased 13 basis points (bps) to 6.37%, setting back the improvement seen over the last five months. Nonetheless, the rate remained 33 bps lower than its level a year ago. The increase in mortgage rates diminished refinance activity, which fell 11.4%. Purchase applications, on the other hand, increased 6.4%, driven by growth in both FHA and VA segments. Relative to March 2025, refinance and purchase activities were up 60.4% and 6.4%, respectively.

By loan type, applications for both adjustable-rate mortgages (ARMs) and fixed-rate mortgages (FRMs) both decreased 4.5% month-over-month. On a year-over-year basis, FRM applications were up 28.6%, while ARM applications rose 62.4%. As of March 2026, ARMs applications–including both purchase and refinance loans–accounted for 8.3% of total applications on a non-seasonally adjusted basis, unchanged from last month and 1.6 percentage points higher than a year earlier. The average contract interest rate for 5/1 ARMs was 5.6% in March.

Loan sizes declined across all categories except purchase loans in March, pulling the overall average loan size down 3.3% to $401,300. The average purchase loan size rose 1.0% to $450,800, while the average refinance loan size fell 10.4% to $351,000. The average ARM loan size declined 4.0% to $929,500.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Which States and Construction Trades Depend the Most on Immigrant Workers? – Eye On Housing

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Immigrants’ share of the construction workforce reached a record high in 2024, with foreign-born workers accounting for more than a quarter of the industry’s labor force (26.3%). The share is even higher among construction trades, for which one in three craftsmen is foreign-born. In several states, reliance on foreign-born labor is especially pronounced: immigrants make up more than 40% of the construction workforce in California and Florida, 39% in Texas, and 38% in Nevada.

According to the government’s occupational classification system, the construction industry employs workers across roughly 390 occupations. Of these, only 28 are construction trades, yet these workers account for about 60% of the total construction labor force. The remaining workers are in finance, sales, administration, and other off-site roles.

The concentration of immigrants is particularly high in key construction trades essential to home building, including drywall and ceiling tile installers (57%), plasterers and stucco masons (56%), roofers (53%), painters (53%), and carpet, floor, and tile installers (51%).

The two most prevalent construction occupations, laborers and carpenters, account for more than a quarter of the industry’s labor force. Among them, 35% of carpenters and 43% of construction laborers are foreign-born. These trades typically require less formal education, yet such workers consistently rank among those with the most severe labor shortages, according to the NAHB/Wells Fargo Housing Market Index (HMI) and NAHB Remodeling Market Index (RMI) surveys.

In the April 2025 HMI survey, more than half of builders reported either some or a serious shortage of workers performing finished carpentry. Shortages are similarly widespread for other construction trades directly employed by builders, such as bricklayers and masons, despite the relatively high share of immigrant workers in these occupations.

Labor shortages are also common among more technical trades such as electricians, plumbers, and HVAC technicians. In contrast to labor-intensive trades, these occupations typically require longer formal training, often involve professional licensing, and tend to attract fewer immigrant workers. Over 40% of surveyed builders reported deficits in these skilled trades.

The reported craftsmen shortage is somewhat less acute for trades where the foreign-born presence is more pronounced, such as drywall, ceiling, flooring installers, painters, and roofers – the trades where immigrants make up more than half of the workforce.

More than half (52%) of the nation’s three million immigrant construction workers reside in the four most populous states – California, Texas, Florida, and New York. California and Texas each have over half a million foreign-born construction workers; together, these states account for roughly one-third of all immigrant workers in the industry. Florida and New York contribute an additional 19% combined.

These states are not only the largest by population but also longstanding immigrant gateways, making them particularly reliant on foreign-born construction labor. Immigrants comprise 42% of the construction workforce in California and 41% in Florida, followed by 39% in Texas and 37% in New York.

At the same time, reliance on foreign-born labor is expanding beyond these traditional hubs. Nevada, for example, recorded the fourth-highest share of immigrant construction workers in 2024 (38%), closely trailing Texas. Maryland and New Jersey also reflect this broader trend, with immigrants accounting for 37% of the construction labor force in each state.

In Connecticut, Massachusetts, Georgia, Virginia, Illinois, Arizona, and North Carolina, more than one-quarter of construction workers are foreign-born. At the other end of the spectrum, several states, including New Hampshire, Montana, Alaska, West Virginia, and Vermont, have immigrant shares below 5%.

Because immigrant workers are disproportionately concentrated in construction trades, their presence among craftsmen exceeds their overall share of the industry in every state. In California and Texas, immigrants account for more than half of all construction tradesmen. In Florida, Maryland, and Nevada, the shares are similarly elevated, approaching 50%, while in New Jersey and New York, more than 45% of craftsmen are foreign-born.

While most states draw most of their immigrant foreign-born workers from the Americas, Hawaii relies more heavily on Asian immigrants. European immigrants are a significant source of construction labor in New York, New Jersey, and Illinois.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Job Growth Rebounds in March – Eye On Housing

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The U.S. labor market showed signs of a modest rebound in March following a weak February, as payroll employment increased and the unemployment rate edged down to 4.3%. Job growth was led by healthcare, construction, and transportation and warehousing. However, signs of cooling are emerging. Job openings posted their largest decline in nearly a year and a half in February, pointing to a potential easing in labor demand. Meanwhile, growing geopolitical uncertainty adds further downside risk to the labor market outlook.

Wage growth slowed in March, with average hourly earnings rising 3.5% year-over-year. This pace is 0.7 percentage points lower than a year ago. Importantly, wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases.

National Employment

According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment increased by 178,000 in March, following a downwardly revised decline of 133,000 jobs in February. Revisions to prior months were modest overall. The monthly change in total nonfarm payroll employment for January was revised up by 34,000 from +126,000 to +160,000, while the change for February was revised down by 41,000 from -92,000 to -133,000. Combined, these revisions reduced previously reported employment by 7,000 jobs.

Despite March’s rebound, job growth in early 2026 remains well below 2024 levels but better than the 2025 pace. Through March, monthly payroll gains have averaged 68,000, compared with 10,000 per month in 2025 and 122,000 in 2024.

The unemployment rate edged down to 4.3% in March from 4.4% in February. Over the month, the number of persons unemployed decreased by 332,000, while the number of persons employed declined by 64,000.

Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—declined 0.2 percentage points to 61.9%. This marks the lowest level since December 2021 and remains below its pre-pandemic level of 63.3% recorded at the beginning of 2020. Among prime working-age individuals (aged 25 to 54), the participation rate also edged down to 83.8%.

In March, job gains were led by health care (+76,000), construction (+26,000), and transportation and warehousing (+21,000), while federal government employment continued to decline. Since reaching a peak in October 2024, federal government employment has fallen by 355,000, or 11.8%.

Construction Employment

Employment in the overall construction sector rose by 26,000 jobs in March, following a downwardly revised loss of 13,000 in February. Within the industry, residential construction added 14,300 jobs, while non-residential construction increased 12,200.

Residential construction employment now stands at 3.3 million in March, including 932,000 workers employed by builders and remodelers and nearly 2.4 million residential specialty trade contractors.

The six-month moving average of job gains for residential construction turned positive at 800 per month, ending a 14-month stretch of negative readings. However, over the last 12 months, residential construction has shed a net 29,300 jobs, marking the thirteenth consecutive annual decline and the longest stretch of annual losses since the Great Recession. Despite these declines, residential construction has gained 1,318,200 positions from its post-Great Recession low.

Meanwhile, the unemployment rate for construction workers rose to 5.6% in March on a seasonally adjusted basis, though it remains relatively low compared with historical norms.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Iran Conflict Reverses Decline in Mortgage Rates – Eye On Housing

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Mortgage rates, which dipped below 6% in February, climbed back up to end the month just under 6.4%. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.18% in March, 13 points (bps) higher than February. The average 15-year rate also increased by the same amount to 5.56%. Despite the recent increase, both rates remain lower than a year ago by 47 bps and 27 bps, respectively.

The rebound in mortgage rates was driven primarily by movements in the 10-year Treasury yield, which jumped 11 bps to 4.24% as tensions in the Middle East escalated. The ongoing Iran conflict has disrupted oil markets, pushing oil prices higher and reigniting fears that inflation could pick up again.

Amid this uncertainty, the Federal Reserve held the federal funds rates unchanged at 3.5% to 3.75%. They revised their inflation expectations higher from 2.4% last December to 2.7% but maintained that one rate cut is still possible in 2026.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Consumer Confidence Climbs Despite Oil Price Surge – Eye On Housing

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Consumer confidence in March rose to a three-month high as consumers’ improved view of current business and labor market conditions outweighed weaker future expectations. Despite the increase, consumers remained concerned as inflation expectations surged to a seven-month high due to the Iran war and job worries from economic uncertainty. The labor market differential, which measures the gap between consumers viewing jobs as plentiful and hard-to-get, remained narrow and reached its second lowest level since February 2021.This is consistent with recent job reports showing fewer job openings and slower hiring.

The Consumer Confidence Index, reported by the Conference Board, is a survey measuring how optimistic or pessimistic consumers feel about their financial situation. This index rose from 91.0 to 91.8 in March, the highest level this year. The Consumer Confidence Index consists of two components: how consumers feel about their present situation and their expected situation. In March, the Present Situation Index increased 4.6 points from 118.7 to 123.3, the largest monthly increase since November 2024; the Expectation Situation Index dropped 1.7 points from 72.6 to 70.9. This is the fourteenth consecutive month for which the Expectation Index has been below 80, a threshold that often signals a recession within a year.

Consumers’ assessment of current business conditions improved in March. The share of respondents rating business conditions as “good” increased by 1.5 percentage points to 21.9%, while those claiming business conditions as “bad” fell by 2.7 percentage points to 16.3%. Meanwhile, consumers’ assessments of the labor market were mixed in March. The share of respondents reporting that jobs were “plentiful” rose by 0.6 percentage points to 27.3%; meanwhile, those who saw jobs as “hard to get” increased by 0.5 percentage points to 21.5%, the highest level since February 2021.

Consumers were more pessimistic about the short-term outlook. The share of respondents expecting business conditions to improve rose from 17.6% to 18.2%, while those expecting business conditions to deteriorate slightly increased from 21.2% to 21.3%. Similarly, expectations of employment over the next six months were more negative. The share of respondents expecting “more jobs” fell from 16% to 15.4%, and those anticipating “fewer jobs” rose by 1.7 percentage points to 27.9%.

The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home fell slightly to 5.7% in March. Of those, the shares planning to buy a newly constructed home and an existing home were unchanged at 0.7% and 2.6%, respectively. The remaining 2.4% were planning to buy a home but were undecided between new or existing homes.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Private Residential Construction Spending Slips in January – Eye On Housing

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Private residential construction spending declined 0.8% in January 2026, following two months of gains. This decline was driven by lower spending across single-family, multifamily construction, and home improvement.  Despite the monthly decline, total residential construction spending remained 2.3% higher than a year ago.

According to the latest construction spending data from the U.S. Census, single-family construction spending edged down by 0.2% in January, consistent with the softer builder confidence reflected in the NAHB/Wells Fargo Housing Market Index (HMI). Compared to a year ago, single-family construction spending was down 5.8%. Meanwhile, multifamily construction spending also decreased mildly, falling 0.7% in January. This marks the second monthly decrease following six consecutive months of modest gains. Compared to a year earlier, multifamily spending was 0.4% higher. Improvement spending (remodeling) declined 1.4% for the month but remained a bright spot on a year-over-year basis, rising 12.5%.

The NAHB construction spending index is shown in the graph below. The index illustrates how   spending on single-family construction has slowed since early 2024, reflecting the impacts of elevated interest rates and ongoing uncertainty over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in July 2023, with the index largely plateauing since late 2024. In contrast, improvement spending has been on an upward trend since the beginning of 2025, supported in part by the aging housing stock and sustained demand for renovation.

Spending on private nonresidential construction was down 3% over a year ago. The annual private nonresidential spending decrease was primarily driven by a $35 billion drop in manufacturing construction spending, followed by a $0.8 billion decrease in commercial construction spending.



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Soft Construction Labor Market Shows Decline for Open Positions – Eye On Housing

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The number of open positions in construction in February was down year-over-year, per the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS). The current level of open jobs is down measurably from three years ago due to declines in construction activity, particularly in housing. However, recent gains for nonresidential construction have not fully offset soft conditions for housing with respect to the demand for construction labor.

The number of open jobs for the overall economy declined in February, falling from 7.24 million in January to 6.88 million in February. The February reading was down from a year ago (7.24 million) due to a cooling labor market.

Previous NAHB analysis indicated that this number had to fall below eight million on a sustained basis for the Federal Reserve to move forward on interest rate reductions. With estimates remaining below eight million for national job openings, the Fed, in theory, should be able to cut further.

The number of open construction sector jobs fell, declining slightly from 230,000 in January to 202,000 in February. This total was down compared to a year ago (255,000). The chart below notes the declining trend that has been in place for unfilled construction jobs since the Fed raised the federal funds rate and home building weakened. While home building employment was declining during the second half of 2025, other subsectors of the construction industry have expanded (e.g. data centers). This has produced volatility within a reduced range in the series since 2024.

The construction job openings rate decreased to 2.4% in February, down from the 3% rate estimated a year ago.

The layoff rate in construction declined slightly to 1.8% in February. The quits rate decreased to 1.3% for the month.

The current data looks similar to the much discussed low-hire, low-fire labor market paradigm.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Micro Markets Lone Bright Spot for Single-Family Building in Fourth Quarter – Eye On Housing

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Single-family construction declined further in the fourth quarter in all but sparsely populated micro counties, according to the NAHB Home Building Geography Index (HBGI). Meanwhile, multifamily construction showed growth in all markets for the first time in over two years as it continued to strengthen given the affordability challenges facing for-sale construction. The HBGI tracks single-family and multifamily permits across seven population density delineated geographies in the United States.

Single-Family

Among the HBGI markets, growth in the fourth quarter of 2025 was only registered in micro counties, which increased 1.6% year-over-year on a four-quarter moving average basis (4QMA). This was the seventh consecutive quarter where micro counties showed growth. All other markets reported declines, with the largest occurring in large metro core counties, posting a decline of 12.8%. All markets showed growth one year ago which quickly dissipated as 2025 presented a host of challenges for builders, ranging from the ongoing affordability crisis to economic uncertainty.

In terms of market share, single-family construction’s largest geography remained small metro core county areas, representing 29.4%.. The smallest single-family construction market remained non metro/micro county areas, with a 4.5% market share. The largest decline in market share over 2025 was in large metro core counties, falling one percentage point to 15.1%. The largest gain over the year was in small metro outlying counties as the market share rose from 10.0% to 10.5%.

Multifamily

Matching single-family, the largest gains for multifamily construction occurred in micro counties, growing 14.0% (4QMA) in the fourth quarter. This was followed by small metro outlying counties which grew 11.6%. The lowest growth was in large metro outlying counties at 1.9%. This quarter marks the first time that all markets showed growth since the first quarter of 2023.

In terms of market share, large metro core counties held the largest at 35.1%. The market share for large metro core counties rose significantly over the course of 2025, as it was 33.3% in the first quarter. The area that lost the most market share over the year was large metro outlying counties, falling from 4.7% to 3.7% in the fourth quarter.

The fourth quarter of 2025 HBGI data along with an interactive HBGI map can be found at https://nahb.org/hbgi.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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