WASHINGTON, D.C. (November 17, 2016) — Metrostudy, a Hanley Wood company, announced today the release of its third quarter 2016 Residential Remodeling Index (RRI) detailing activity in the remodeling and replacement industry.
Remodeling activity in the U.S. remained robust through the third quarter of 2016. The national RRI Activity Index measured 105.0 in third quarter, marking a new all-time high and a healthy increase of 4.5% from one year earlier. In the current market, remodelers are expressing difficulty in keeping up with demand.
The national RRI has now posted eighteen consecutive quarters of year-over-year gains since 2011, when activity in the industry had bottomed out. Metrostudy’s latest forecast calls for continued increases in the near term, with year-over-year growth averaging 4.4% in 2017 and 3.3 percent in 2018.
“Workers are now beginning to see more money in their pockets, and that, combined with the tight housing market, is driving remodeling activity across the country. In the latest October jobs report, average hourly earnings grew 2.8% over the past twelve months, which was the fastest pace since the end of the Great Recession. With the consumer price index having increased only 1.5% over the same period, workers are seeing greater spending power,” said Mark Boud, Chief Economist at Metrostudy. “Additionally, tight supply in the housing market continues to push up home prices, allowing more owners to tap home equity lines of credit to invest in updating their homes. Over the next few years, as mortgage rates increase, we expect more people to choose to stay-put in their current homes and renovate, giving further support to a stable forecast for the remodeling industry.”
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, 369 out of 381 Metropolitan Statistical Areas are expected to see year-over-year growth in remodeling and replacement projects in 2016, with average growth of 4.2%.
For more information on accessing the full quarterly report, please email RRI@hanleywood.com.