Metrostudy Releases Q2 2019 Residential Remodeling Index (RRI) — Positive Outlook Remains Despite Expectations of Tight Housing Market
WASHINGTON, D.C. (August 23, 2019) — Metrostudy, a Hanley Wood company, announced today the release of its second quarter 2019 Residential Remodeling Index (RRI), detailing activity in the remodeling and replacement industry.
In the second quarter of 2019, the national Residential Remodeling Index increased to a new high of 118.3, which was a 3.4 percent gain from one year earlier and up 0.7 percent from first quarter 2019. The RRI has now experienced twenty-nine consecutive quarters of year-over-year gains since national remodeling activity bottomed in 2011. Metrostudy’s latest forecast calls for continued gains over the next few years; however, slower rates of growth are expected. The RRI is expected to average year-over-year increases of 3.2 percent in 2019, 2.0 percent in 2020, and 2.4 percent in 2021.
“At current levels, the job market is generating more than sufficient demand to feed the housing and remodeling markets. Existing home sales in July posted their first year-over-year increase in seventeen months due to the recent drop in mortgage rates. While the uptick in sales is reassuring, supply decreased 1.6 percent year-over-year and remains tight, which means sustained increases in future sales will be a challenge,” says Mark Boud, Chief Economist at Metrostudy. “The shortage of existing home supply is being exacerbated by low levels of new home construction, and by the fact that Americans are simply staying put, choosing to stay where they have locked in low mortgage rates from years past. These trends are expected to continue over the next few years, which will cause some loss in remodeling activity due to low housing turnover, but also some buoying and fueling of activity as more Americans stay put and upgrade their current homes. Overall, we expect continued increases in remodeling over the short term, just at slower rates of growth compared to the past few years,” said Boud.
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, 380 Metropolitan Statistical Areas are expected to see growth in 2019 project volume, and among these markets the average growth rate is expected to be 3.1 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 $1,000. 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.