Big-ticket remodeling activity nationwide rose 1.2% in the third quarter from the second and 4.8% from 2016's July-to-September period, hitting a new high, according to Metrostudy's latest Residential Remodeling Index (RRI) released today.
The index rose to an unprecedented 110.0 in the third quarter, meaning that the economic conditions known to influence remodeling activity are 10% better than the old peak in early 2007, just before the Great Recession. The RRI has shown year-over-year gains for 22 consecutive quarters.
“Hurricanes Harvey and Irma hampered national job growth in September, but payrolls bounced back in October with 261,000 new jobs, while the unemployment rate fell to 4.1%, the lowest level since Year 2000," said Mark Boud, chief economist at Metrostudy, a sister company to REMODELING. "There are very little signs of the labor market slowing, and more signs the economy as a whole is gaining strength.
The index is based on a statistical model that takes into account such data as household level remodeling permits, employment statistics, and a market's economic health. It then uses that model to predict the number and dollar volume of home improvement and replacement projects worth at least $1,000.
"There is growing sentiment that the U.S. economy is finally firing on multiple cylinders," Boud added, "and we expect the remodeling market to benefit over the near term as consumers become increasingly confident. We also expect project activity to increase noticeably over the next year in the hurricane-hit areas of Texas and Florida as recovery begins.”
Indeed, primarily because of Hurricanes Harvey and Irma, Metrostudy predicts the RRI will average year-over-year gains of 4.7% throughout next year. It previously had predicted 3.6% gains.
In addition, Metrostudy believes all 381 Metropolitan Statistical Areas nationwide will see year-over-year growth in remodeling and replacement projects this year. The average growth will be 4.4%. This is the first year the nation has seen such across-the-board gains, Metrostudy noted.
For more information on accessing the full quarterly report, please email [email protected].
