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HIRI Predicts Deceleration of Home Improvement Spending Through 2024

The Home Improvement Research Institute (HIRI), the nation’s leading resource for market research concerning the home and building products industry, has forecasted the current national inflation bulge will lead to a deceleration in home improvement spending. Growth in the total home improvement products market is expected to decelerate from 7.2% in 2022 to 1.5% in 2023, with the consumer market growing by 0.6% and the professional market growing by 3.6%. This research was released to HIRI members in September in the biannual Home Improvement Products Market Forecast.

Impact of Inflation

Recent home improvement product market growth appears to have peaked in 2021 at 15.8%, driven by surges in demand for home renovation during the height of the COVID-19 pandemic. Today, rising prices on core personal consumption expenditures are eroding households’ real income growth and slowing consumer spending, including on home improvement projects. While wages across the nation are slowly increasing, they have not yet outpaced the impacts of inflation.

HIRI predicts that core prices will continue to rise, at least in the short term. A softening in demand is expected to ease price pressures over the coming months, and core PCE prices are expected to decline slowly over the next year.

“After two years of double-digit growth in the home improvement market, economic pressures are expected to slow category activity next year,” says HIRI operations director Pam Heidel. “However, the market is still expected to grow, which is good news for our industry.”

Consumer Market

Consumer growth is expected to slow considerably in 2023 given that many homeowners recently brought renovation projects to completion during the pandemic. HIRI estimates consumer market sales to advance by 0.6% in 2023 to $386 billion and for growth to average 2.2% in 2024–26.

HIRI further breaks down this forecasted growth by product category, where it can be assumed that many products sought out at the consumer level are related to DIY projects.

Top-Growing Merchandise Lines for Consumers

Nominal dollar growth rates between 2022 and 2026:

  • Lawn and garden equipment and supplies: 4.8%
  • Nursery stock and soil treatments: 4.0%
  • Paint and preservatives: 3.8%
  • Roofing and supplies: 3.7%
  • Gypsum and specialty boards: 3.6%
  • Soft-surface floor coverings: 3.6%
  • Hard-surface floor coverings: 3.2%

Professional Market

HIRI projects professional market sales will grow by 10.2% in 2022 and slow to 3.6% in 2023. As pandemic-driven demand eases over the coming years, growth of professional market sales is expected to average 3.2% in 2024–26. The most in-demand projects requiring professional contractors can be presumed by the growth of specific categories over the coming years.

Top-Growing Merchandise Lines for Professionals

Nominal dollar growth rates between 2022 and 2026:

  • Roofing and supplies: 7.5%
  • Gypsum and specialty boards: 7.3%
  • Hard-surface floor coverings: 6.8%
  • Lawn and garden equipment and supplies: 6.0%
  • Kitchen and bath cabinets: 5.9%
  • Windows, skylights and patio doors: 5.9%
  • Insulation and weatherization products: 5.9%

“It’s important to keep up with past and future home improvement data because it helps remind our industry of the big picture,” Heidel says. “No matter which direction things may be turning, HIRI will supply the research needed to help our members make informed decisions.”

About Lindsey Thompson

Lindsey joined the NHPA staff in 2021 as an associate editor for Hardware Retailing magazine. A native of Ohio, Lindsey earned a B.S. in journalism and minors in business and sociology from Ohio University. She loves spending time with her husband, two kids, two cats and one dog, as well as doing DIY projects around the house, going to concerts, boating and cheering on the Cleveland Indians.

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