Metrostudy Releases Q2 2017 Residential Remodeling Index (RRI)— RRI Continues to Reach New Highs, Forecast Remains Bright
WASHINGTON, D.C. (August 15, 2017) — Metrostudy, a Hanley Wood company, announced today the release of its second quarter 2017 Residential Remodeling Index (RRI), detailing activity in the remodeling and replacement industry.
In the second quarter of 2017, the national RRI, which measures overall remodeling activity, increased to a new high of 108.7, representing a solid 4.7 percent increase from 103.9 one year earlier and a 1.3 percent increase from 107.3 in the previous quarter. The index has now seen twenty-one consecutive quarters of year-over-year gains since 2011, which was the bottom of the remodeling market in terms of activity.
As the U.S. economy sees continued improvements, the outlook for remodeling remains positive. At year-end 2017, the RRI is expected to see a 4.6 percent year-over-year increase. Thereafter, between first quarter 2018 and fourth quarter 2020, the index is forecast to average year-over-year increases of 3.4 percent and quarter-to-quarter increases of 0.8 percent.
“At the mid-point of 2017, the remodeling market remained vigorous and on track for more near-term gains. Current demand for home-improvement is healthy as U.S. economic growth accelerated in second quarter 2017, boosted in part by a resurgence in consumer spending. U.S. employers also added more workers than expected in July, while June’s employment numbers were upwardly revised. Additionally, current shortages of new homes are forcing many would-be homebuyers to choose renovation over purchase,” said Mark Boud, Chief Economist at Metrostudy. “Although stronger wage growth is still desired in the labor market, consumer confidence did rebound to a 16-year high in July. We expect the Residential Remodeling Index to continue increasing this year and through the three-year forecast. Any easing in project activity would more likely be due to limitations caused by labor shortages in the construction industry and a tight supply of existing homes for sale, rather than any deterioration in consumer driven demand for home renovation.”
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, all 381 Metropolitan Statistical Areas are expected to see year-over-year growth in remodeling and replacement projects in 2017, with average growth of 4.4 percent. This marks the first year since launching the RRI that all 381 MSAs are forecast to see growth, underscoring the current level of strength in the market.
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 2017, 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.