The home improvement industry has proven resilient over the past year, and despite some lingering economic uncertainty and below-trend growth, there are positive signs of homeowners regularly planning new repairs, renovations, and maintenance projects in the coming year.
Findings from HIRI’s 2023 Project Decision Study reveal that 79% of homeowners tackle multiple home improvement projects annually, with the average number of projects completed up from 2.7 in 2015 to 3.4 in 2023.
At the end of last year, about 61% of homeowners were planning to undertake at least one home improvement activity in the next 90 days — or first quarter of 2024. About 18% were planning at least one large project, according to data in our Home Improvement Quarterly Project Activity Tracker, and kitchen projects were at the top of the list for most frequently planned projects.
Further research into consumer spending and sentiments gives a glimpse of where they are planning to invest money into home improvement in the coming months. This data can help you identify unmet needs that provide areas of opportunity, formulate appropriate new marketing messages, and identify initiatives for driving growth.
In the large scheme of things, there are some positive indicators and trends within the housing industry that will likely impact how homeowners approach improvements, maintenance, and repairs in 2024.
Mortgage rates — which have been incredibly volatile for the past several years — have started to balance out by the end of 2023. Looking ahead towards some Federal Reserve rate cuts later in 2024 that may help ease housing affordability pressure could lead to more movement among existing home inventory.
In 2020 and 2021, we saw many individuals who were planning to move at some point accelerate their decision-making to take advantage of low mortgage rates. The opposite was true in 2023, with people choosing to stay in their current homes because of high mortgage rates, which created a sort of “lock-in” effect that drove remodeling and repairs to keep homes functional and comfortable for a longer duration.
That lock-in dynamic — coupled with a limited housing supply and rising home prices — is expected to continue in 2024, although there are signs that single-family construction will continue going strong, as we saw in 2023 and existing home sales will thaw at least a little.
For home improvement professionals, the overall industry resiliency should provide some confidence, although it is worth noting that costs are inevitably a barrier for homeowners, especially in light of consumer uncertainty and a heightened risk of recession.
Homeowner spending on home improvement projects has changed a bit over the past couple of years. We saw a significant spike in total project spend in 2021, and although it eased down in 2023, it is still above historic levels, according to our 2023 Project Decision Study.
That being said, there is a lot of individual project variation in terms of driver, spending, timing and seasonality, incidence rate, and product/material shopping and purchasing decisions. For example, residence characteristics and homeowner demographics play large roles in determining what projects are completed.
When it comes to projects being planned for 2024, gardening and landscaping, as well as interior painting, are reportedly going to be the most popular. Another 18% of respondents are planning a bathroom remodel, 16% are planning a kitchen remodel, and 12% are planning to replace or refinish flooring in the coming year. These three projects also had the highest percentage rates of being canceled or postponed by homeowners in 2023.
The No. 1 reason for postponing or canceling a project is cost. Findings in the 2023 Monthly Homeowner Activities and Sentiments Tracker show that 61% of homeowners who postponed or canceled a home improvement, repair, or maintenance project in December 2023 identified budget or financial concerns as the primary culprit. This is pretty on par for the past year. The second primary reason was schedule or timing at 30%.
Our research, in partnership with The Farnsworth Group, shows that helping homeowners track their costs accurately and efficiently will help them avoid getting an unpleasant surprise when the project is completed, ruining what could otherwise be a positive experience. For example, developing project planning and budgeting apps and paper checklists can aid homeowners and enhance their overall satisfaction, leading them to take on more home improvement projects in the future.
The costs of most home improvement projects have risen and a few are becoming significantly more expensive over time. For example, the average price of a roof replacement was $7,700 in 2015 and increased to an average of nearly $15,000 in 2023. A bathroom addition also jumped from an average of $9,000 to an average of approximately $15,000 in the same timeframe.
In 2023, a majority of respondents spent about $100 to $499 in home improvement and maintenance costs. In December of last year, 18% spent between $500 to $999, and 20% spent between $1,000 and $4,999.
Looking ahead to 2024, here is a breakdown of planned projects by cost:
HIRI members have access to specific dollar figures reported by homeowners for what they intend to spend on each project type in 2024. These insights are available in the Q4 2023 edition of the Quarterly Home Improvement Project Activity Tracker.
At a median cost of $3,000, work on the home exterior shell was the most expensive project for homeowners in the last quarter of 2023, and it stands to be the most expensive activity in 2024, as well. However, only about 5% of respondents were planning for this type of project in the first quarter of 2024. Meanwhile, painting projects are by far the most planned home improvement activity.
Additionally, about 50% of homeowners felt costs met their initial expectations on projects completed in the fourth quarter of 2023. A few areas where costs were significantly more than expected include whole home mechanics, exterior structures, and kitchen projects.
To help mitigate costs, an increasing number of homeowners are taking on DIY projects, or at least trying to contribute some labor to their home improvement activities alongside professionals. This is a trend we saw last year that is expected to continue in 2024.
Home improvement spending shows a small average increase over the past two years, with 35% of homeowners boosting their spending in 2023. There isn’t likely to be rapid growth in 2024, but homeowner spending is still strong.
To dig deeper into the numbers and plan for the coming year, become a member of the Home Improvement Research Institute and get instant access to our full data sets. Our wealth of industrywide research into consumer behaviors, sentiments and activities will help stretch your market research dollars and supplement your company’s internal reports and custom market research to give you more insights and confidence in your strategic decision-making.
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