Metrostudy Releases Q2 2018 Residential Remodeling Index (RRI)— Good Times Roll for Remodeling Amid Long Streak in Job Growth and Home Equity
WASHINGTON, D.C. (August 21, 2018) — Metrostudy, a Hanley Wood company, announced today the release of its second quarter 2018 Residential Remodeling Index (RRI), detailing activity in the remodeling and replacement industry.
Second quarter 2018 saw the national Residential Remodeling Index reach a new all-time high of 114.4, a reading that was 5.2 percent higher than a year earlier and up 1.3 percent from the previous quarter. The RRI has now experienced twenty-five consecutive quarters of year-over-year gains since activity bottomed in 2011. The index’s strong year-over-year growth is being fueled by the long economic expansion and a still-strong housing market, despite the latter showing some recent slowing in sales.
“The U.S. economy is in the midst of its longest streak of consecutive monthly job growth in history, and, the median existing home price has recorded seventy-six consecutive months of year-over-year gains,” said Mark Boud, Chief Economist at Metrostudy. “With record setting levels in employment growth and home equity, it is little wonder that Americans are investing in home upgrades. We expect the remodeling industry to close strong in 2018, with more moderate, but still-steady growth in 2019. While the good times roll, there are still some headwinds for the industry. Slowing home sales amid tight inventory is limiting remodeling growth potential, as is the acute shortage of construction labor. And more recently, even before the steel and aluminum tariffs were initiated, we saw a sharp rise in costs for residential construction materials. Rising costs and effects of tariffs will need to be watched carefully over the next several quarters.”
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 forecast to see growth in 2018 project volume, and the average rate of growth is expected to be 4.3 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 engaging media, high-profile executive events, and strategic marketing solutions. To learn more, visit hanleywood.com.