At the 2019 HIRI Insights Summit, a two-day research conference in Chicago presented by the Home Improvement Research Institute (HIRI), industry analysts and home improvement executives gathered to discuss the health of home improvement in the U.S.
To start the event, Nino Sitchinava, Ph.D., principal economist for Houzz, a leading platform for home remodeling and design, presented an update on the home improvement market. Learn three takeaways from her presentation you can use to strengthen your operation and best serve customers in the midst of a remodel.
1. Weather is a major driver of home improvement projects.
In her keynote address, Sitchinava explored the ways natural disasters impact home improvement. While many may believe hurricanes are the main drivers of home repairs, Sitchinava pointed to other extreme weather events like midwestern flooding in 2019 as the cause behind many current home repairs and renovations.
She presented data revealing that between 1980-1989, only three natural disasters caused more than $1 billion in damage each. In 2018 alone, 14 natural disasters have caused more than $1 billion in damage each. A recent Houzz survey of renovating homeowners indicates that one in eight home improvement tasks is done to remedy damage from inclement weather.
2. Older homes are ready for their tune-ups … and they might be costly.
Data shows 61 percent of homes constructed between 1990-1999 are undergoing improvements and repairs. On average, homeowners are electing to complete 2.6 projects for these homes.
About 57 percent of homes built before 1940 were renovated between 2016-2017. Sitchinava says many of these homes have had many previous renovations, hence the lower rate of projects compared to the 1990s. However, renovations on older homes are more likely to go over budget. For homes built between 1921 and 1940, 18 percent of home repairs went at least 25 percent over budget.
3. The home improvement market growth is expected to remain positive.
Sitchinava says home improvement rates may slow in the years ahead, but they are expected to stay positive. According to the HIRI Market Growth estimates, in 2009, just a year after the housing crisis, the home improvement market experienced a -9.3 percent drop. However, home improvement market growth is strong as 2017 saw a 6.5 percent growth rate year over year, and the market is projected to grow by 4.1 percent in 2019.
HIRI data suggests home improvement market growth may fall to 3 percent in 2020, but remain positive until 2023.
Nino Sitchinava is the principal economist at Houzz, which counts more than 40 million unique monthly visitors and more than 1.5 million active home professionals. Her background includes a Ph.D. in economics and she has prior experience with economic consulting, including business and litigation.