WASHINGTON, D.C. (November 17, 2016) — Metrostudy, a Hanley Wood company, announced today the release of its third quarter 2016 Residential Remodeling Index (RRI) detailing activity in the remodeling and replacement industry.
Remodeling activity in the U.S. remained robust through the third quarter of 2016. The national RRI Activity Index measured 105.0 in third quarter, marking a new all-time high and a healthy increase of 4.5 percent from one year earlier. In the current market, remodelers are expressing difficulty in keeping up with demand.
The national RRI has now posted eighteen consecutive quarters of year-over-year gains since 2011, when activity in the industry had bottomed out. Metrostudy’s latest forecast calls for continued increases in the near term, with year-over-year growth averaging 4.4 percent in 2017 and 3.3 percent in 2018.
“Workers are now beginning to see more money in their pockets, and that, combined with the tight housing market, is driving remodeling activity across the country. In the latest October jobs report, average hourly earnings grew 2.8 percent over the past twelve months, which was the fastest pace since the end of the Great Recession. With the consumer price index having increased only 1.5 percent over the same period, workers are seeing greater spending power,” said Mark Boud, Chief Economist at Metrostudy. “Additionally, tight supply in the housing market continues to push up home prices, allowing more owners to tap home equity lines of credit to invest in updating their homes. Over the next few years, as mortgage rates increase, we expect more people to choose to stay-put in their current homes and renovate, giving further support to a stable forecast for the remodeling industry.”
Metrostudy produces the RRI to provide the industry visibility into local market remodeling activity, forecasted future activity, and potential demand. According to the company’s second quarter report, 369 out of 381 Metropolitan Statistical Areas are expected to see year-over-year growth in remodeling and replacement projects in 2016, with average growth of 4.2 percent.
For more information on accessing the full quarterly report, please email RRI@hanleywood.com.
About the Residential Remodeling Index
The RRI is a quarterly measure of the level of remodeling activity in 381 metropolitan statistical areas (MSA) in the U.S., with the national composite reflecting the national level of activity. “Activity” includes home improvement and replacement projects, but does not include maintenance or projects of less than $1000. The seasonally adjusted index shows the relative level of activity in the geography specified (MSA or national composite) compared to 2007 (the baseline year). A number above 100 indicates a level of remodeling activity higher than the level of activity at the beginning of 2007, which was the peak of remodeling activity in the prior decade.
The index is produced through a statistical model that leverages detailed data on remodeling activity, including household level remodeling permits, and consumer-reported remodeling and replacement projects. Quarterly historical results for the national composite and for each of the 381 Metropolitan Statistical Areas in the U.S. are available back to 2004. In addition, Metrostudy also produces annual estimates of project counts and expenditures as well as forecasts of the quarterly RRI and annual projects and expenditures.
Metrostudy is the leading provider of primary and secondary market information to the housing and residential construction industry. Metrostudy’s actionable business intelligence informs investment decisions that mitigate risk and grow revenue for builders, developers, lenders, suppliers, retailers and manufacturers. It’s the construction industry’s only integrated data intelligence solution supported by the most extensive U.S. geographic coverage. Learn more at Metrostudy.com.
About Hanley Wood
Hanley Wood is the premier company serving the information, media, and marketing needs of the residential, commercial design and construction industry. Utilizing the largest analytics and editorially driven Construction Industry Database, the company provides business intelligence and data-driven services. The company produces award-winning media, both digital and print, high-profile executive events, and strategic marketing solutions. To learn more, visit hanleywood.com.