Metrostudy Releases Q1 2018 Residential Remodeling Index (RRI)— Economy and Home Values Push Remodeling Growth to Strongest in Four Years
WASHINGTON, D.C. (May 21, 2018) — Metrostudy, a Hanley Wood company, announced today the release of its first quarter 2018 Residential Remodeling Index (RRI), detailing activity in the remodeling and replacement industry.
In first quarter 2018, the Residential Remodeling Index improved to a new all-time high of 112.9, which represents a solid increase of 5.2 percent from one year earlier and growth of 1.4 percent from the previous quarter. First quarter’s year-over-year gain was the strongest since first quarter 2014, while quarter-to-quarter growth was the highest since third quarter 2013, underscoring the current vigor within the industry.
The RRI has now experienced twenty-four consecutive quarters of year-over-year gains since the bottom of remodeling activity in 2011. The RRI is now forecast to average year-over-year gains of 5.1 percent throughout 2018, followed by 2.7 percent in 2019, and continue reaching new highs through 2020.
“Remodeling activity is being driven by solid gains in employment and rising home values, factors that are giving homeowners the confidence to invest in their homes,” said Mark Boud, Chief Economist at Metrostudy. “Americans are not only undertaking a greater number of remodeling projects, but larger and more expensive ones. And as a reflection of the long, slow economic expansion that we have been in, many more Americans are just now initiating replacement-type projects that had been deferred during the recovery from the Great Recession. We expect another strong year for the remodeling industry in 2018, and are waiting to see what effect recent tax cuts have on the economy. Early surveys suggest some Americans are increasing their remodeling budgets due to their taxes being lowered.”
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 first quarter report, 370 Metropolitan Statistical Areas are forecast to see growth in 2018 project volume, and the average growth rate is expected to be 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 $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.