Metrostudy Releases Q2 2016 Residential Remodeling Index (RRI)
Remodeling Activity Expands to New High, Pushed by Strong Housing Market
WASHINGTON, D.C. (August 16, 2016) — Metrostudy, a Hanley Wood company, announced today the release of its second quarter 2016 Residential Remodeling Index (RRI) detailing activity in the remodeling and replacement industry.
The U.S. remodeling market continued to post strong gains in activity through the first half of 2016. The national RRI Activity Index came in at 104.2 in second quarter 2016, which is a new all-time high, and marks an increase of 4.9 percent from one year earlier and 1.4 percent gain from the previous quarter.
The national RRI has now posted seventeen consecutive quarters of year-over-year gains since activity in the remodeling market bottomed in 2011. Metrostudy’s latest forecast calls for continued increases in the near term, with year-over-year growth averaging 5 percent through the remainder of 2016 and 4 percent in 2017.
“The remodeling market continues to benefit from job growth, improvements to wages, and a hot housing market. In several housing markets across the country, home prices have now surpassed the peak levels of last decade. Higher prices are bringing more homes to be listed on the market, spurring remodeling before and after a sale, but on the other side, increasing affordability issues are also convincing more people to stay put and invest in upgrading their current residence,” said Mark Boud, Chief Economist at Metrostudy. “Most of the remodeling activity currently taking place is for projects that offer greater return on investment, like large-scale renovations meant to upgrade kitchens and bathrooms, or add rooms. Smaller projects for deferred maintenance, or maintenance projects that were put on hold in the aftermath of the recession, are also increasing as more people now have means and confidence to catch-up on maintenance. We are expecting steady expansion for the remodeling market over the next few years, as the trend of investing in current homes increases, especially once mortgage rates lift-off from current lows.”
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, 363 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 4.5 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, high-profile executive events, and strategic marketing solutions. To learn more, visit hanleywood.com.