Pro-worthy remodeling activity nationwide recorded its 20th straight quarter of growth during 2017's first three months and looks set to keep rising, albeit a bit more slowly, through 2020, today's release of Metrostudy's latest Residential Remodeling Index (RRI) indicates.
The index hit a new high of 107.3, which means remodeling-friendly conditions are 7.3% better than they were during the previous peak in spring 2007 and are 4.5% ahead of where the index was in 2016's first quarter. And unlike past years, in 2017 all 381 Metropolitan Statistical Areas across the country can expect to see year-over-year growth in remodeling and replacement projects.
Metrostudy, a sister company to REMODELING, extrapolates its RRI from a combination of economic indicators and other factors, such as remodeling permit counts, that together give a portrait of how many replacement and remodeling jobs worth at least $1,000 are occurring in each of the 381 MSAs. The national RRI is a composite of those local market reports.
There were roughly 11.4 million pro-worthy remodeling and replacement projects nationwide last year worth $170.62 billion, Metrostudy estimates. This year, it predicts the number will rise to 11.9 million worth $180.05 billion.
“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,” Mark Boud, Metrostudy's chief economist, said in a news release. “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 stage-–jobs, dating, marrying (or no 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.”
