Metrostudy, a Hanley Wood company, announced today the release of its second quarter 2018 Residential Remodeling Index (RRI), detailing activity in the remodeling and replacement industry.
Second quarter 2018 saw the national Residential Remodeling Index reach a new all-time high of 114.4, a reading that was 5.2% higher than a year earlier and up 1.3% from the previous quarter. The RRI has now experienced twenty-five consecutive quarters of year-over-year gains since activity bottomed in 2011. The index’s strong year-over-year growth is being fueled by the long economic expansion and a still-strong housing market, despite the latter showing some recent slowing in sales.
“The U.S. economy is in the midst of its longest streak of consecutive monthly job growth in history, and, the median existing home price has recorded seventy-six consecutive months of year-over-year gains,” said Mark Boud, chief economist at Metrostudy. “With record setting levels in employment growth and home equity, it is little wonder that Americans are investing in home upgrades. We expect the remodeling industry to close strong in 2018, with more moderate, but still-steady growth in 2019. While the good times roll, there are still some headwinds for the industry. Slowing home sales amid tight inventory is limiting remodeling growth potential, as is the acute shortage of construction labor. And more recently, even before the steel and aluminum tariffs were initiated, we saw a sharp rise in costs for residential construction materials. Rising costs and effects of tariffs will need to be watched carefully over the next several quarters.”
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, all 381 Metropolitan Statistical Areas are forecast to see growth in 2018 project volume, and the average rate of growth is expected to be 4.3%.
For more information on accessing the full quarterly report, please email RRI@hanleywood.com.
