WASHINGTON, D.C. (February 17, 2016) — Metrostudy, a Hanley Wood company, announced today the release of its fourth quarter 2015 Residential Remodeling Index (RRI) detailing activity in the remodeling and replacement industry.
Remodeling activity in the U.S. closed-out 2015 with a firm rate of growth and most housing and economic indicators are forecasting a steady rate of expansion for the industry over the next few years. The national RRI Activity Index measured 103.1 in fourth quarter 2015, which was up 5.4 percent from one year earlier and up 0.9 percent from the previous quarter. The national RRI has now posted fifteen consecutive quarters of year-over-year gains since remodeling activity bottomed out at the end of 2011.
The RRI was baselined at 100.0 in first quarter 2007, which was the peak of remodeling activity last decade. The index surpassed the 100.0 mark in second quarter 2015, indicating full recovery for the industry, and with fourth quarter’s increase to 103.1, remodeling activity has reached a new record level. The forecast calls for the index to steadily reach new highs over the next few years with average year-over-year growth of 3.9 percent in 2016 and 3.4 percent in 2017. The remodeling market is set to benefit from strong existing home sales, a high share of old housing stock, and continued improvement in the labor market.
“Remodeling activity remains on solid footing with the big driver being the existing home market. Sales of previously owned-homes in 2015 were the highest since 2006, and with low supply, home prices continue to trend upward. Increasing home values are bringing more homes on the market and spurring remodeling and replacement – before and after a sale,” says Brad Hunter, Chief Economist at Metrostudy. “Additionally, the labor market closed 2015 on a high note with a strong 262,000 jobs created in December. While January’s job growth came in under expectations, the unemployment rate fell to its lowest level since February 2008. And, more significantly out of January’s jobs report, the wage growth that has largely been missing during the recovery from the Great Recession has finally started to emerge, posting its best six-month stretch. Average hourly earnings jumped a half percentage point in January, the largest increase in a year. The forecast for remodeling is steady due to these improving fundamentals.”
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, all 381 Metropolitan Statistical Areas are expected to see year-over-year growth in remodeling and replacement projects in 2015, with average growth of 3.9 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 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.