The January 2012 Residential Remodeling Index (RRI) shows that overall remodeling activity declined 4% in 2011 compared with 2010. The revised data series, which is completely refreshed each quarter, reveals a slightly lower than anticipated bottom in the fourth quarter of 2011. This “second bottom” registered a total decline of just under 21% from the 2007 peak.
Taking into account recent improvement in the US economy and housing, the new forecast calls for 3% growth in remodeling activity across the US in 2012. Compared with 2011, this translates into the addition of 120,000 remodeling and replacement projects nationally representing an estimated increase in remodeling expenditures of $2.6 billion. Although growth forecast to be just 0.3% in the first quarter, overall activity is expected to increase steadily through the remainder of the year.
Despite the modest growth rate forecast in the national averages, a much stronger increase in activity is expected in many recovering markets. In fact, of the 366 metropolitan statistical areas (MSAs) covered by the RRI, 304 are forecast to grow an average of 3.6%; just 22 markets are expected to decline.