Metrostudy Releases Q4 2018 Residential Remodeling Index (RRI)— Job Growth, Home Equity Keeps Remodelers Busy; Outlook Remains Positive
WASHINGTON, D.C. (February 19, 2019) — Metrostudy, a Hanley Wood company, announced today the release of its fourth quarter 2018 Residential Remodeling Index (RRI), detailing activity in the remodeling and replacement industry.
In the fourth quarter of 2018 the national Residential Remodeling Index increased to a new all-time high of 116.7. The index notched a gain of 4.8 percent from one year earlier and 0.8 percent from the previous quarter. The RRI has now experienced twenty-seven consecutive quarters of year-over-year gains since national remodeling activity cratered in 2011.
Metrostudy’s latest forecast calls for continued growth in the RRI over the next several years; however, 2019 and 2020 are expected to see slower growth rates compared to the last few years of booming business. The moderation of gains over the next 24 months will be mostly tied to maturation of the housing cycle.
“The remodeling market remains busy as the nation continues to see strong job growth and record levels of home equity, especially in equity rich coastal markets. We expect continued growth for the industry in 2019, with some stabilization, mostly due to the slowing in existing home sales, which will sap some potential,” said Mark Boud, Chief Economist at Metrostudy. “The housing cycle is running in the late innings as prospective homebuyers began to show sensitivity to higher mortgage rates in 2018. Rising mortgage rates over the next few years will continue to dampen home sales, but will also persuade more Americans to stay-put in their current homes and renovate there. An aging housing stock exacerbated by low levels of new home construction are additional factors that we believe will allow the remodeling cycle to extend into ‘extra’ innings,” 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 fourth quarter report, 379 Metropolitan Statistical Areas are expected to see growth in 2019 project volume, and these markets are expected to average growth of 3.0 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.