Metrostudy Releases Q1 2019 Residential Remodeling Index (RRI)— Strong Economy Supports Remodeling Amid Slow Housing Turnover
WASHINGTON, D.C. (May 23, 2019) — Metrostudy, a Hanley Wood company, announced today the release of its first quarter 2019 Residential Remodeling Index (RRI), detailing activity in the remodeling and replacement industry.
The national Residential Remodeling Index increased to a new high of 117.5 during the first quarter of 2019, marking a 4.1 percent increase from one year earlier and a 0.7 percent increase from the previous quarter. The RRI has now experienced twenty-eight consecutive quarters of year-over-year gains since national remodeling activity bottomed in 2011. The latest RRI forecast calls for continued growth, but at slower rates compared to the last few years. The RRI is expected to average year-over-year gains of 3.2 percent in 2019, 2.3 percent in 2020, and 3.2 percent in 2021.
“The healthy economy continues to drive the US home improvement market. While wage growth has not been strong enough to boost inflation, it is ample to support economic growth as stimulus from last year’s tax cut wanes,” said Mark Boud, Chief Economist at Metrostudy. “Our forecast for remodeling activity remains on an upward trajectory; however, we do expect growth rates to cool this year, and next, due to lower housing turnover via the slowdown in existing home sales. On the other hand, lower T-bill rates and the Federal Reserve’s recent dovish stance should result in very little upward pressure on mortgage rates. Improved affordability from lower rates and slowing prices could revive existing home sales and boost remodeling’s forecast,” says 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 first 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.