This entire year is continuing to shine with improvement in all areas of the remodeling industry! The Residential Remodeling Index (RRI) is showing an increase with remodeling and replacement activity this month.
But before we get into this, what exactly is the Residential Remodeling Index?
The RRI is a quarterly measure of the level of remodeling activity in 366 metropolitan statistical areas (MSA) in the U.S., along with the national composite reflecting the national level of activity. Home improvement and replacement projects are considered “activity”, but maintenance or projects of less than $500 are not included. The seasonally adjusted index shows the relative level of activity in the geography specified (MSA or national composite) compared to 2007 (the baseline year). A number above 100 indicates a level of remodeling activity higher than the level of activity at the beginning of 2007, which was the peak of remodeling activity in the prior decade.
Each quarter, we are continuing to see a slow but steady improvement in the remodeling industry. Due to an increase in housing numbers in multiple markets, remodeling and replacement activity is beginning to rise and will most likely continue to improve for many upcoming quarters.
Although remodeling and replacement project activity has improved, it is only a slight improvement – so it may be early to start getting too excited. The seasonally adjusted second quarter national composite of the RRI (Residential Remodeling Index) registered an 80.87 score which is a 0.3% improvement over the first quarter. If the growth in remodeling activity continues, 2013 can prove to be the best year for remodeling activity since 2006! If that holds true, it would still be a very encouraging sign for the remodeling sector.
In 2011, the number of estimated remodeling and replacement projects was a little over 10 million, a 5% decline of the 10.5 million completed projects estimated in 2010. Yet for 2012, remodeling and replacement projects are predicted to be just over 10.1 million. And the news for 2013 is even better as 10.5 million projects are projected.
It’s clear to see that along with new-construction activity, consumer confidence, and home prices rising, housing is finally showing signs of life again.
There are many reasons for the increase in demand such as aging housing stock and the resulting need for home improvement and upgrades by the baby boomer generation. With projects that have been postponed for several years due to the recession, it is hard to keep up with advancing technology and new trends. Also, existing homes need to be upgraded and improved in order to create a livable environment during retirement years. Installing radiant heating from WarmlyYours is among those upgrades; providing a warm, luxurious, and comfortable living space for those who are choosing to age-in-place.