Remodeling and replacement activity nationwide continued its slow, steady growth pattern in 2015’s fourth quarter, Metrostudy’s latest Residential Remodeling Index (RRI) released today shows. The latest update to RRI calculates that the economic conditions known to lead to remodeling work were 5.4% better than in the fourth quarter of 2014 and 0.9% above where things stood in the third quarter of last year.
The national RRI reached 103.1, which means the index of activity now stands 3.1% above where it was during the first-quarter of 2007, a time when—until recently—remodeling was at its most prosperous time ever.
The RRI hasn’t shown a year-over-year decline since the first three months of 2012 and a quarter-to-quarter decline since the fall of 2011. Metrostudy predicts future quarters to 2018 will post year-over-year gains ranging from 2.0% to 4.1%, while quarter-to-quarter rises will range from 0.5% to 0.9%.
“Remodeling activity remains on solid footing, with the big driver being the existing home market,” Brad Hunter, Metrostudy’s chief economist, said in a statement. “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.
The RRI 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. “Activity” includes home improvement and replacement projects, but does not include maintenance or projects of less than $1,000.
Metrostudy (a sister company to Remodeling) also publishes individual RRI data for 381 Metropolitan Statistical Areas. As of the four quarter of 2015, the data point to all 381 MSAs showing year-on-year growth in 2015, with an average growth rate of 3.9%.