Metrostudy Releases Q3 2017 Residential Remodeling Index (RRI)— Economy is Heating Up Remodeling; Hurricanes to Bump Up Activity
WASHINGTON, D.C. (November 14, 2017) — Metrostudy, a Hanley Wood company, announced today the release of its third quarter 2017 Residential Remodeling Index (RRI), detailing activity in the remodeling and replacement industry.
The RRI, measuring overall remodeling activity in the nation, improved to a new high of 110.0 in third quarter 2017. The latest RRI gained 4.8 percent from one year earlier and 1.2 percent from the previous quarter. Third quarter 2017 marks twenty-two consecutive quarters of year-over-year gains in the index since 2011, the bottom of remodeling activity nationwide.
Third quarter’s 4.8 percent annual gain was the strongest rate of growth since a 5.5 percent annual increase was observed in first quarter 2014, demonstrating how a strengthening economy in 2017 is fueling home renovations. Hurricanes Harvey and Irma are expected to cause noticeable bumps in remodeling activity through 2018 as reconstruction and repairs get underway in impacted areas. The RRI is now expected to average year-over-year gains of 4.7 percent throughout 2018, up from expectations of 3.6 percent in Metrostudy’s previous release.
“Hurricanes Harvey and Irma hampered national job growth in September, but payrolls bounced back in October with 261,000 new jobs, while the unemployment rate fell to 4.1 percent – the lowest level since Year 2000. There are very little signs of the labor market slowing, and more signs the economy as a whole is gaining strength,” said Mark Boud, Chief Economist at Metrostudy. “GDP rose three percent in third quarter 2017, the second-straight quarter of solid growth. Stronger global growth and a weaker dollar has driven demand for American goods and services in recent months, boosting the manufacturing sector and driving exports. There is growing sentiment that the U.S. economy is finally firing on multiple cylinders, and we expect the remodeling market to benefit over the near term as consumers become increasingly confident. We also expect project activity to increase noticeably over the next year in the hurricane-hit areas of Texas and Florida as recovery begins.”
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 third 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 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.