The annual Home Improvement Insights Summit is one of the most informative events in our industry. Over the course of two days in Chicago, top industry experts from around the country present research, uncover trends and share forward-looking ideas to help attendees make informed decisions about the home improvement products market.
Did you miss this year’s Summit? Not to worry. We’ve assembled five high-level takeaways summarizing the hottest topics covered at the event.
Here’s what you need to know about the state of the home improvement products market:
Danushka Nanayakkara-Skillington, assistant vice president, forecasting and analysis for the National Association of Homebuilders, predicts that we will experience a mild recession but nothing as drastic or long-lived as the 2008 U.S. recession. Here are some of her findings:
Nanayakkara-Skillington also forecasts that single-family homebuilding starts will decline through 2023 due to increasing interest rates, with a predicted rebound in 2024. This will temporarily put pressure on housing affordability. Another factor in the market? The entrance of the millennial generation into peak homebuying years.
Millennials constitute the largest group of homebuyers (46%) and will drive up demand at a time when new homes are on the decline and house affordability rates are historically low. The NAHB/Wells Fargo Housing Opportunity Index is the lowest it’s been in decades, signaling that homeownership is a less accessible prospect than it was in the past.
Despite the gloomy outlook for housing affordability, Carlos Martín, project director of the Remodeling Futures Program for the Harvard Joint Center for Housing Studies, pointed out that price increases raise equity in homeowners’ existing properties, thereby raising the incentive to invest in home remodeling.
Another interesting perspective came from Zonda’s Principal of Building Products Todd Tomalak. Tomalak agrees there will be a decline in remodeling over the next year or so: Consumers are concerned about recessionary fallout and increased home prices, which will cause them to reevaluate where they want to invest their money. Yet, as prices begin to stabilize, discontented homeowners will begin to focus more on improving their current homes as the housing market experiences record-low inventory mixed with higher prices.
Generational differences were heavily covered at the Summit, and we would be remiss if we didn’t touch on the importance of Generation Z’s swift approach toward homebuying years. Although Gen Z is not a large audience for home improvement products yet, marketers should have their unique characteristics on the radar.
“The more we can learn about Gen Z now, the faster we will be able to adapt and be able to connect, understand and market to them when the time comes,” said Alicia Rainwater from The Center for Generational Kinetics. She claims Gen Z supports brands with strong personas and messages that align with their key values, and the social issues they care most about are climate change and social justice. If your brand strategy doesn’t include a genuine corporate social responsibility partnership yet, you may want to consider one if you’ll be marketing to Gen Z in the near future.
Albert Vita, founder of home improvement online retailer Homebirds, spoke about emerging technology and its potential impact on home improvement shopping. Vita introduced the concept of eras in the history of the world wide web as it has evolved through different technologies and formats and used different drivers, or backbones to grow. He then focused on the growing prevalence of the latest era, “Web 3.0,” and how it will reshape the way home improvement shopping happens.
Web 3.0 includes the development of the metaverse. By 2026, it is predicted that 25% of people will spend at least one hour per week in the metaverse for work, shopping, education, social or entertainment purposes. Vita predicts this will impact the home improvement industry by giving shoppers the ability to see and touch products “in person” while shopping virtually in the metaverse. While this ability is still several years out, thinking about innovations on the horizon and how they will impact your organization is a helpful practice for home improvement brands.
The Home Improvement Insights Summit brought timely conversations and helpful, actionable advice from experts navigating a fast-changing industry. However, it is important to remember that conditions are subject to change at a moment’s notice. It’s crucial to stay up to date with the most current home improvement category research and forecasts to make the best decisions for your business.
Joining the Home Improvement Research Institute as a member provides access to monthly insights and information to help you think proactively about obstacles both current and future homeowners will face. Brands that better understand where the market is headed will be better equipped to address these challenges.
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