The Home Improvement Research Institute Predicts Continued Growth for Home Improvement Products Market, with Ease in Consumer Spending Through 2026

The Home Improve­ment Research Insti­tute, the nation’s lead­ing resource for mar­ket research con­cern­ing the home and build­ing prod­ucts indus­try, has fore­cast­ed con­sumer spend­ing on home improve­ment prod­ucts will steady after two years of extreme demand fol­low­ing the COVID-19 pan­dem­ic. Ris­ing infla­tion reduced real house­hold income and com­plet­ed projects led HIRI to fore­cast that over­all con­sumer mar­ket sales will increase by 2.8% in 2023 to $382.5 bil­lion. This research was con­duct­ed in part­ner­ship with IHS Mark­it and released to HIRI mem­bers at the end of Q1 in the bian­nu­al Home Improve­ment Prod­ucts Mar­ket Forecast. 

Look­ing at growth over the last 10 years, the 2.8% increase reflects a healthy mar­ket. In 2020 and 2021 alone, con­sumer spend­ing on home improve­ment soared to 15% and 13.3%, respec­tive­ly, as home­own­ers invest­ed time and mon­ey into their spaces that served as homes, offices, schools, gyms, and more. 

“The extreme increase in demand for home improve­ment prod­ucts that we wit­nessed because of the pan­dem­ic was bound to calm soon­er or lat­er,” said HIRI Research Direc­tor Matthew Craig. ​“While con­sumer spend­ing is eas­ing slight­ly on home improve­ment prod­ucts, it is impor­tant to empha­size that any future boost is com­pound­ed on pre­vi­ous unprece­dent­ed growth. The mar­ket is still per­form­ing very well.”

HIRI cites dif­fer­ing eco­nom­ic cir­cum­stances and home­own­er needs as rea­sons for the shift in con­sumer demand. This year, house­holds are see­ing real income decline as infla­tion climbs and stim­u­lus pay­ments recede. The Fore­cast pre­dicts U.S. real dis­pos­able income to decline by 3.5% in 2022 after climb­ing 2.2% in 2021. 

For those left unaf­fect­ed, dis­pos­able funds are expect­ed to be direct­ed toward hob­bies or oth­er major pur­chas­es, as many report pan­dem­ic-era projects being brought to com­ple­tion. How­ev­er, con­trac­tor-led projects are expect­ed to see an uptick as home­own­ers become com­fort­able allow­ing pro­fes­sion­al help into their liv­ing spaces again.

In the short term, the Fore­cast pre­dicts the total build­ing prod­ucts mar­ket to grow by 4.2% in 2022, with the con­sumer mar­ket grow­ing by 2.6% and the pro­fes­sion­al mar­ket grow­ing by 7.9%. Between 2024 and 2026, the con­sumer mar­ket is expect­ed to aver­age about 3.2% growth, and the pro­fes­sion­al mar­ket to aver­age around 4.8% growth for the same peri­od. This pro­jec­tion high­lights a sig­nif­i­cant rise in con­trac­tor activ­i­ty as well as an over­all con­tin­ued inter­est in home improve­ment in the com­ing years.

The Fore­cast fur­ther breaks down this growth by seg­ment­ed mer­chan­dise line.

Top-growing merchandise lines for consumers

The com­pound annu­al growth rate for the con­sumer mar­ket between 2022 and 2026:

• Lawn and gar­den equip­ment and sup­plies: 6.0%
• Dimen­sion­al lum­ber and boards: 5.1%
• Doors and mold­ing: 5.0%
• Elec­tri­cal sup­plies: 4.8%
• Nurs­ery stock and soil treat­ments: 4.8%
• Ply­wood and relat­ed prod­ucts: 4.6%
• Sid­ing and exte­ri­or trim: 4.2%

Top-growing merchandise lines for professionals

The com­pound annu­al growth rate for the pro­fes­sion­al mar­ket between 2022 and 2026:

• Dimen­sion­al lum­ber and boards: 7.6%
• Doors and mold­ing: 7.5%
• Ply­wood and relat­ed prod­ucts: 7.2%
• Sid­ing and exte­ri­or trim: 6.4%
• Elec­tri­cal sup­plies: 6.3%
• Lawn and gar­den equip­ment and sup­plies: 6.0%
• Paint sun­dries and oth­er sup­plies: 5.8%

Since 1992, the Home Improve­ment Prod­ucts Mar­ket Fore­cast has pro­vid­ed the home improve­ment industry’s only prod­uct focused size of mar­ket study with five-year fore­casts for the con­sumer and pro­fes­sion­al mar­kets. Prod­uct cat­e­go­ry – lev­el detail is pro­vid­ed for the con­sumer mar­ket and, since 2018, for the pro­fes­sion­al mar­ket. Geo­graph­ic detail is also pro­vid­ed for the nine cen­sus divi­sions with annu­al esti­mates at the state lev­el. The Fore­cast is released in the spring (Q2) and Fall (Q3) exclu­sive­ly to HIRI members.

HIRI mem­bers receive unlim­it­ed access to Home Improve­ment Prod­ucts Mar­ket Fore­casts and $1 mil­lion worth of addi­tion­al indus­try research. For indus­try pro­fes­sion­als, pub­lish­ers, mar­ket­ing exec­u­tives, and more, HIRI is the top source of data to help guide busi­ness decisions.

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