Remodeling Activity Hits New High, Latest RRI Shows
Continued improvements in the U.S. economy drove the latest Residential Remodeling Index (RRI) to its 21st consecutive period of year-over-year quarterly gains since 2011 and an all-time record high of 108.7, according to Metrostudy’s second-quarter report released today.
The increase to 108.7 indicates remodeling conditions are 8.7% better than the previous peak in spring 2007, 4.7% better than the 103.9 reading in the April-to-June period last year, and 1.3% better than the first quarter’s reading of 107.3.
Produced by REMODELING’s sister company Metrostudy, the RRI estimates the level of remodeling and replacement activity in 381 metropolitan statistical areas. The company then determines a national composite and compares it to the baseline period of Q1 2007.
“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,” said Mark Boud, chief economist at Metrostudy. “Additionally, current shortages of new homes are forcing many would-be homebuyers to choose renovation over purchase.”
“We expect the Residential Remodeling Index to continue increasing this year and through the three-year forecast,” Boud added. “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.”
Looking to the future, the outlook still remains positive. By the end of the year, the RRI is predicted to see a 4.6% year-over-year increase, while predictions beyond 2017 indicate average year-over-year increases of 3.4% and quarter-to-quarter increases of 0.8%.