Methodology · Version 1.0
A weekly leading indicator of homeowner demand for residential trades work, anchored to the seasonal norm. ERDI measures demand entering the pipeline, not work already booked, which is what makes it a forward signal.
What ERDI Measures
The Echelon Residential Demand Index tracks homeowner demand for residential trades work across HVAC, plumbing, electrical, roofing, and remodeling. It reads demand entering the pipeline rather than work already booked. That distinction is what makes it a leading signal, in the same way the Dodge Momentum Index leads construction starts rather than reporting them after they happen.
ERDI is a weekly composite of six demand drivers. Five draw on public and commercial data. The sixth, the Echelon Proprietary Signal, draws on the Echelon database, which is not publicly available. That proprietary component is what separates ERDI from a composite anyone could rebuild from open sources.
What 100 Means
ERDI is anchored to the seasonal norm, not to a fixed calendar level. Every component is measured against its own same-week average over the prior three years.
This is the right anchor because residential trades demand genuinely runs higher in July than in January. An index that simply tracked the seasons would tell you nothing. ERDI tells you whether this July is stronger or weaker than a normal July.
The Six Components
ERDI weights six components. The weighting leans on the most direct demand signals, gives weather only enough room to register without whipsawing the number, and holds the proprietary component at a meaningful share so the index cannot be reverse-engineered from public data alone.
| Component | Weight | What it captures | Primary source |
|---|---|---|---|
| Search / Intent Demand | 30% | Homeowners actively searching for service and replacement, the most direct real-time signal | Search-volume data, trade-term search trends |
| Housing Turnover | 20% | New owners drive service, inspection, and replacement work | MBA weekly mortgage purchase applications, NAR existing-home sales |
| Permit Velocity | 15% | Install, remodel, and mechanical work entering the pipeline | Census Building Permits Survey, local permit portals |
| Financing Conditions | 10% | The affordability lever on big-ticket replacement and financed jobs | Freddie Mac PMMS weekly mortgage rate |
| Seasonal / Weather Stress | 10% | Emergency and peak-load service demand, the week-to-week mover for HVAC | NOAA heating and cooling degree days |
| Echelon Proprietary Signal | 15% | Competitive intensity and market activity, the unforgeable input | Echelon database: ad presence, review velocity, and listing activity by market |
Weights sum to 100. Search and turnover together carry half the index. The proprietary component holds 15 percent, enough that the index cannot be rebuilt from public data alone.
How It Is Calculated
Three steps, run every week.
Step 1 · Index each component to its seasonal norm
For each component, divide this week’s reading by the same-week average of the prior three years, then multiply by 100.
Financing is inverted, so that a lower rate reads as stronger demand.
Step 2 · Weight and sum
Step 3 · Report three things, not one
The level, where demand sits against the seasonal norm. The week-over-week move, direction and momentum. And the four-week trend, so a single noisy week does not mislead.
Worked example (illustrative)
| Component | Weight | Index | Contribution |
|---|---|---|---|
| Search / Intent | 0.30 | 105 | 31.50 |
| Housing Turnover | 0.20 | 98 | 19.60 |
| Permit Velocity | 0.15 | 101 | 15.15 |
| Financing | 0.10 | 96 | 9.60 |
| Weather Stress | 0.10 | 112 | 11.20 |
| Echelon Proprietary | 0.15 | 104 | 15.60 |
| ERDI | 102.7 |
If the prior week read 101.9, the headline reads: ERDI 102.7, up 0.8, with demand running just under 3 percent above the seasonal norm.
The Breadth Line
Alongside the level, ERDI reports how many of the six components sit above their seasonal norm. In the worked example, four of six are above 100. Broad-based strength is more durable than a single component carrying the index, and the breadth line is the fastest way to read which kind of week it is.
Regional Sub-Indices
The identical calculation runs on region-filtered inputs to produce regional sub-indices across eight regions. The weekly Regional Spotlight leads with the relevant region’s reading. A market-level read for a specific metro is available through an Echelon Intelligence Report.
Publishing Discipline
An index earns trust only if it is computed the same way every week. ERDI holds to fixed rules.
Fixed components and weights. They do not change from issue to issue. When the methodology is revised, the change is versioned and announced with its reason.
The full component table is published every week. The six readings are shown, not just the headline.
Revision policy. Some inputs publish on a lag and are later revised. Any provisional component is marked, and a restated prior week is noted.
Same day, same time, every week. Monday morning, Eastern.
This methodology page is permanent. When ERDI is cited, the citation can point to exactly how it is built.
Current Status
ERDI is published as version 1.0. Components are brought online in sequence, and the index is labeled v1.0 (partial) until all six feeds are live, then v1.0 (full). Being open about the build is more credible than presenting the index as if it arrived complete.
Calibration and Revisions
The weights are a reasoned starting point, not a backtested certainty. They are logged against field observation and deal flow and tuned as signal accumulates. Every change is versioned. The discipline of refining the index in the open is part of why it can be trusted.
Frequently Asked Questions
What does ERDI measure?
ERDI measures homeowner demand for residential trades work entering the pipeline, across HVAC, plumbing, electrical, roofing, and remodeling. It reads demand that is forming rather than work already booked, which makes it a leading indicator rather than a backward-looking report.
What does a reading of 100 mean?
A reading of 100 means demand is running exactly at the normal level for that time of year. ERDI is anchored to the seasonal norm, so a reading above 100 means demand is hotter than a normal week of that season, and below 100 means it is softer.
How often is ERDI published?
ERDI is published weekly, every Monday morning Eastern. The full table of all six component readings is published alongside the headline number, not just the headline alone.
What makes ERDI different from public data like permits or mortgage rates?
Permits and rates are single public series. ERDI is a weighted composite of six demand drivers anchored to the seasonal norm, and 15 percent of it is the proprietary Echelon component, drawn from the Echelon database of competitive and market activity. That component is not publicly available, so the index cannot be rebuilt from open sources.
Can I get ERDI for my specific market?
Yes. The same calculation runs at the regional level across eight regions, and a market-level read for a specific metro is available through an Echelon Intelligence Report.
See ERDI in context
ERDI leads every issue of The Echelon Report, the weekly residential-trades intelligence brief. Read the latest issue, or commission a market-level read for your own metro.