Remodeling Marches Forward in First Quarter, Set for Complete Recovery in Third Quarter
WASHINGTON, D.C. (May 18, 2015) — Metrostudy, a Hanley Wood company, announced today the release of its first quarter 2015 Residential Remodeling Index (RRI) detailing activity in the remodeling and replacement industry.
The national RRI Activity Index scored a reading of 98.6 in first quarter 2015, marking a year-over-year increase of 4 percent. This was the strongest year-over-year growth experienced since first quarter 2014, when a 5.3 percent gain was observed. The RRI has now posted twelve consecutive quarters of positive year-over-year gains since the remodeling industry bottomed out at the end of 2011.
The first quarter RRI also posted an increase of 1.4 percent over fourth quarter’s revised measure of 97.3, which represents thirteen consecutive quarter-to-quarter gains and highlights how remodeling activity in the U.S. continues to walk a distinct upward path. Demand fundamentals in the U.S. continued to steadily improve through first quarter 2015, and subsequently, our previous call for the RRI to reach full recovery, or, a reading of 100.0 or more, in third quarter 2015 remains on track.
“The Residential Remodeling Index strengthened in first quarter 2015, fending-off any kind of seasonal dip to remain in a period of steady expansion. Remodeling activity in the U.S. continues to benefit from healthy job gains, increased consumer sentiment, and better household formation numbers,” says Brad Hunter, Chief Economist at Metrostudy. “Job growth laid an egg in March, but bounced back in April, easing fears that the economy is heading back to another extended slowdown. The missing piece that most Americans are waiting for, however, is meaningful wage gain. Remodeling and replacement activity is high right now for those with fatter wallets, mainly baby-boomers and mature families. Strength especially lies with retirees seeking to age in place in their current homes.”
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 first quarter report, 380 out of 381 Metropolitan Statistical Areas are expected to see year-over-year growth in remodeling and replacement projects in 2015, with average growth of 5 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 $1000. 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, a Hanley Wood company, is the largest provider of comprehensive research and insight for the real estate industry. Builders, developers, banks, manufacturers, retailers and many other industries all rely on Metrostudy's data and analytics to support strategic business decisions at the local, regional and national market level. www.Metrostudy.com
About Hanley Wood
Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.