Metrostudy, a Hanley Wood company, said Thursday that its first quarter 2017 Residential Remodeling Index (RRI) reached a new all-time high of 107.3, which represented a solid gain of 4.5% from one year earlier.
The index has now seen twenty consecutive quarters of year-over-year gains since 2011, which was the bottom of remodeling activity nationwide. The index has posted annual gains above 4.0% since the second quarter of 2015 and is forecast to continue doing so through fourth quarter 2017, before some slight moderation is expected.
“The current strength of the remodeling market can be attributed primarily to economics – low mortgage rates, strong existing home sales, the bull stock market run, good job gains, and now more recently, wage gains,” said Mark Boud, Chief Economist at Metrostudy. “Yet, as the economic cycle matures over the next few years, rates increase and full employment translates to less robust job growth over time, demographic trends will play a bigger role in driving demand for remodeling. Baby-boomers will continue retiring and aging in place as they have been, and Millennials will be increasingly maturing in their life stages –jobs, dating, marrying (or not marrying), buying a home, and choosing to remodel that home. And, with housing affordability an issue in many markets across the country, Millennials will be more inclined to purchase older, more-affordable existing homes that will necessitate renovations. Demographics will matter greatly to remodeling over the next few years as the economic cycle matures.”
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, all 381 Metropolitan Statistical Areas are expected to see year-over-year growth in remodeling and replacement projects in 2017, with average growth of 4.4% –this marks the first year since launching the RRI that all 381 MSAs are forecast to see growth.
For more information on accessing the full quarterly report, please email RRI@hanleywood.com.
