DIY Home Improvement Behaviors Changing With Low Personal Savings Rates and Financial Pressures

How DIY Home Improvement Behaviors Are Changing With Financial Pressures

Apr 11, 2023

Each month, in part­ner­ship with The Farnsworth Group, HIRI releas­es updates to the DIY and DIFM Home Improve­ment Month­ly Track­er.

This month­ly track­er sur­vey­s home­own­ers to learn what they see, think, and are doing right now in the home improve­ment are­na. Find­ings also cov­er how projects are being com­plet­ed, how often they are delayed, top chal­lenges to start­ing home improve­ment projects and more.

Sentiments Towards Starting New Home Improvement Projects

As of find­ings from March of 2023, the major­i­ty of home­own­ers feel it is a bad time to start a large remod­el­ing project. This is defined as any project over $5,000.

The num­ber of home­own­ers with neg­a­tive sen­ti­ments towards larg­er remod­el­ing projects has remained con­stant for the entire first quar­ter of 2023, rang­ing from 52 – 57% each month.

Inter­est­ing­ly, Jan­u­ary sen­ti­ments were the worst, at 57%, while neg­a­tive sen­ti­ments towards start­ing remod­el­ing projects cost­ing more than $5,000 has soft­ened over the last 2 months.

Fur­ther, the num­ber of home­own­ers with pos­i­tive sen­ti­ments towards start­ing small­er remod­el­ing projects remains high, at 44% as of March 2023. This pos­i­tive sen­ti­ment reflects DIY and DIFM atti­tudes towards any home improve­ment project under $5,000.

These fac­tors com­bined sig­nal that repair and main­te­nance demand will remain high while dis­cre­tionary projects are liable to be post­poned until con­sumer sen­ti­ments sur­round­ing infla­tion, per­son­al wealth, and cash on hand are improved.

Consumer Savings Continue to Decline, Impeding Home Improvement Undertakings

In the spe­cif­ic con­text of Home Improve­ment, since the pri­ma­ry source of fund­ing for remod­el­ing projects is cash/​savings, a decrease in per­son­al sav­ings rates is indica­tive of future demand declines.

How did you pay for your most recent home improvement, repair, or maintenance project?

While con­sumer sav­ings rates were high in 2020 and 2021, peak­ing at 33.8% in April of 2020 and then 26.3% in March of 2021, cur­rent per­son­al sav­ings rates in 2023 have shrunken.

Accord­ing to esti­mates released by the Bureau of Eco­nom­ic Analy­sis on March 31, the per­son­al sav­ings rate is cur­rent­ly 4.6%, in con­trast to a 27.6% per­son­al sav­ings rate in March 2021, at the height of the covid-19 stim­u­lus releas­es. The cur­rent per­son­al sav­ings rate of 4.6% is rough­ly half of the his­tor­i­cal medi­an (8.7%) which is the medi­an from 1960-present.

U.S. Personal Savings Rate

Fur­ther, the cur­rent per­son­al sav­ings rate is below the 12 month change rate in the con­sumer price index (CPI). This rever­sal in 2022 and 2023 com­pared to 2020 and 2021 is great­ly dri­ving the slow­down in con­sumer demand for home improve­ment projects and prod­ucts back to what are more in-line with 2 – 3% CAGR in the home improve­ment and build­ing prod­ucts industry.

Personal Savings Rate Compared to 12mo Change in CPI

As dis­cre­tionary house­hold bud­gets shrink once excess sav­ings from 2020 and 2021 are ful­ly spent, dis­cre­tionary project demand will like­wise decrease. Repair and main­te­nance spend­ing will dri­ve rev­enue for the home improve­ment indus­try, as there is not an indi­ca­tion that con­sumers will opt to defer repair and main­te­nance expenses.

How would a recession impact your home improvement, repair or maintenance projects over the next year?

Choosing to DIY vs. Hire a Pro to DIFM

As home­own­ers rec­og­nize their bud­gets are look­ing tighter and they have few­er dis­cre­tionary funds to lever­age for the home improve­ment projects they want to do, they are increas­ing­ly turn­ing to DIY, rather than DIFM.

In March of 2023, 78% of home­own­ers opt­ed to DIY because it was cheap­er if they did the work, up from 67% just two months pri­or, in January.

Why did you complete your home improvement project yourself rather than hiring a professional?

For DIFM home­own­ers who are still opt­ing to hire a con­trac­tor, the top chal­lenge dur­ing their selec­tion process con­tin­ues to be that con­trac­tors are too expen­sive,” fol­lowed close­ly by the Pro being too busy and not avail­able in the desired timeframe.

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