Remodelers ended the third quarter slightly more upbeat than they started it. The NAHB/Westlake Royal Remodeling Market Index came in at 62, up one point from the second quarter, the National Association of Home Builders reported Oct. 8. A year earlier it read 60.
Any reading above 50 means more remodelers call conditions good than poor, so 62 is a decent number. The split inside it is the story. Work in hand scored 70 for the third straight quarter. The forward-looking half of the index sits at 54.
What the third-quarter Remodeling Market Index measured
NAHB surveys its remodeler members each quarter and asks them to rate five parts of the market as good, fair or poor. Three cover current jobs by size. Two cover what’s coming: the rate of leads and inquiries, and the backlog of signed work. Each is scored from 0 to 100 and seasonally adjusted, and the headline number averages the current and future halves. The release doesn’t say how many remodelers answered or give a margin of error, so a one-point move shouldn’t carry much weight.
Current conditions held at 70. Inside that, large jobs of $50,000 or more rose two points to 66. Mid-sized jobs, from $20,000 to just under $50,000, slipped two points to 71. Small jobs under $20,000 fell one point to 73.
The Future Indicators Index rose two points to 54. Leads and inquiries came in at 53 and backlog at 56, each up two.
Large remodeling projects gained while small jobs slipped
That mix deserves a second look. The smallest jobs still score highest, but they lost ground, and the $50,000-plus category is the one that gained.
Set the numbers against NAHB’s third-quarter 2025 release and the pattern gets clearer. Large projects read 64 then and small projects 71, so both are two points higher now. The lead gauge has moved more. It was 49 a year ago, under the break-even line, and it’s 53 today. Backlog hasn’t moved at all: 56 then, 56 now.
So remodelers are fielding more calls than last fall and holding the same amount of signed work. Elliott Pike, NAHB’s remodelers chair and a remodeler in Homewood, Alabama, said high material costs and labor shortages are a problem in some regions and that economic uncertainty is “making some potential customers hesitant to move forward with projects.”
Remodeler sentiment against the rest of housing
NAHB Chief Economist Robert Dietz said the reading fits the group’s forecast that remodeling activity holds steady in 2026 and grows slightly in 2027. He said labor shortages are stretching project timelines, in part because data center construction is competing for workers, and that remodeling is taking a larger share of construction because it’s less sensitive to interest rates than new building.
The rate argument has support in the rest of the housing data. NAHB’s economists put the average 30-year fixed mortgage rate at 6.86% in September. Census figures showed housing completions down 27% in a year, and new-home sales at a 684,000 annual pace in August. An owner who won’t swap an old mortgage for a new one at that rate still has a kitchen that’s 25 years old.
The data center point cuts the other way for a small firm. A remodeler pricing a $60,000 addition hires from the same pool of electricians and carpenters as commercial jobs that can pay more, and a homeowner’s schedule is the one that slips.
NAHB’s index is a sentiment gauge, built from members’ ratings and not from permit counts or dollars. It can’t say how much work is out there. It can say which way the people doing the work think it’s heading.
Right now they think demand is fine and capacity is the limit. Leads are up four points in a year. Backlog is up zero.