Weekly Real Estate News
Summary
Remodeling sentiment remained positive in the third quarter, with NAHB reporting an index of 62. Contractors cited high material costs and shortages of skilled labor.
Remodeling contractors remain more upbeat about their business than new-home builders, even as expensive materials, tight labor supplies and hesitant customers make projects harder to schedule. The National Association of Home Builders reported Thursday that its Remodeling Market Index rose one point to 62 in the third quarter of 2026.
A reading above 50 means more remodelers describe market conditions as good than poor. The index is a measure of sentiment, not a count of contracts signed or dollars spent. Its modest increase therefore suggests continued resilience among surveyed firms rather than a broad acceleration in construction activity.
Contractors gave current business conditions a score of 70 for the third consecutive quarter. Their assessment of future business was more restrained: the forward-looking component rose two points to 54. The difference matters because remodelers may be busy completing projects already sold while finding it harder to convert new inquiries into signed work.
Among current project categories, large jobs costing at least $50,000 scored 66, up two points. Mid-sized projects, from $20,000 to less than $50,000, slipped two points to 71. Smaller jobs scored 73, down one point. All three remained comfortably above the neutral 50 threshold, but the readings offer little evidence of a new boom.
On the forward-looking side, inquiries increased two points to 53, while the backlog component gained two points to 56. Those are positive readings, though much closer to the dividing line between favorable and unfavorable sentiment.
“Remodeler sentiment remained stable in the third quarter, although remodelers in certain parts of the country continue to report issues with high material costs and finding enough labor to finish projects on time,” said NAHB Remodelers Chair Elliott Pike in the association’s release. He added that economic uncertainty was causing some prospective customers to delay decisions.
NAHB Chief Economist Robert Dietz said labor shortages are being intensified by immigration enforcement and competition from data-center construction. He expects remodeling activity to be broadly stable this year, with slight growth in 2027. That outlook is the association’s forecast, not a measured result.
Remodeling has a different interest-rate exposure from new construction. A homeowner repairing a roof, adding accessible living space or updating a kitchen may stay put rather than finance a move. Still, major renovations can depend on home-equity borrowing, and today’s mortgage-rate environment can make financing more expensive. Freddie Mac’s October 8 survey put the average 30-year fixed rate at 7.40%, up from 7.28% a week earlier.
The latest remodeling sentiment also sits alongside a more cautious view of future renovation spending. WRE previously reported on Harvard’s forecast for slowing remodeling activity and a third-quarter cooling in remodeling-related home-equity demand. The measures capture different things: contractor confidence, projected spending and consumer financing demand should not be treated as interchangeable.
For remodelers, the immediate question is whether the pipeline of new leads strengthens enough to replace completed work without further stretching crews. NAHB’s next quarterly survey will provide a fresh reading, but the current numbers point to a market still operating above its sentiment midpoint with little room to absorb another sustained cost increase.
