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Home Improvement Industry Update

Monthly Economic and Industry Update Report & Analysis

The Economic & Industry Update covers general economic data, housing market data, and home improvement market data. This monthly report is comprised mainly of publicly available data, but compiled into one place, saving members time.

Objectives

Identify and evaluate key economic indicators to understand their influence on the home improvement market.

Examine the housing market trends to gauge their effects on the demand for home improvement and building products

Investigate changes in consumer behavior and spending patterns on home improvement and renovations projects.

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FAQs

How do economic trends affect home improvement projects?

The home improvement industry is affected by multiple variables, including real disposable income levels, employment, interest rates, housing activity, and other far-reaching economic trends. All of these factors, and several others, influence the types of projects that homeowners pursue and how much they're willing to invest in home improvement activities and purchasing the necessary products and materials. Additionally, the housing market can impact whether homeowners are willing and able to move or stay and remodel their existing properties. The Home Improvement Research Institute's monthly Economic and Industry Update is a comprehensive look at broader economic and housing trends and their effect on the demand for home improvement projects. HIRI's biennial Project Decision Study also examines how homeowners plan, fund, and execute remodeling and renovation projects and how they are influenced by key economic trends.

What economic factors influence homeowner purchasing decisions?

The Home Improvement Research Institute (HIRI) offers a monthly Economic and Industry update that covers how economic factors influence homeowner purchasing decisions. Some of the economic factors tracked in the study include the Consumer Confidence Index (CCI), the Consumer Price Index (CPI), homeownership rates, household formations, and more. Additionally, there is data on overall size of the home improvement products market in the U.S., along with future forecasts, and a closer look at the consumer segment. The study offers insight on changes in consumer behavior and spending patterns on home improvement and renovation projects and products. It also includes analysis of key economic factors, explaining the relevance of the data and how it can be used to plan for trends in homeowner purchasing decisions.

How does inflation influence home improvement spending?

Data from the Home Improvement Research Institute (HIRI) shows that inflation, among other economic trends, has a direct influence on home improvement spending. As inflation persists, homeowners prioritize necessity-driven projects, including routine maintenance and repairs, over discretionary upgrades. Additionally, high inflation may influence homeowners to delay projects, reduce scope, or purchase more cost-effective products and materials to reduce their spending. HIRI's monthly Economic and Industry Update includes data related to inflation, including the latest on the Bureau of Economic Analysis' Personal Consumption Expenditures (PCE) price index and the U.S. Bureau of Labor Statistics' Consumer Price Index (CPI). From this information, and other economic data included in the report, you can track the rate of inflation over time.

Do home improvement projects increase or decrease during a recession?

Based on findings from the Home Improvement Research Institute (HIRI), home improvement projects tend to decrease during a recession, although the decline is less significant than that for other consumer spending categories, such as travel and entertainment. In general, home improvement spending, for projects and products, is closely tied to a variety of economic factors, including wage growth, consumer financial health, interest rates, and housing market conditions. While a recession doesn't diminish the demand for home improvement projects, it can affect the feasibility of accomplishing them. Homeowners may be included to reduce the scope of their project or delay it, particularly for discretionary home improvement projects. HIRI's monthly Economic and Industry Update provides a comprehensive look at general economic data, housing market data, and home improvement market data to help industry professionals understand their influence on the market and develop business strategies accordingly.

What is the relationship between housing market trends and home improvement?

What is happening in the housing market has a significant influence on the home improvement market, from levels of activity and choosing to hire professionals to the types of projects prioritized. As the average age of the overall housing stock in the U.S. continues to increase, it creates a sustained demand for upgrades and repairs. Additionally, if affordability and the potential for mobility are low, homeowners are more likely to focus on remodeling their existing properties to increase their longevity and habitability. The Home Improvement Research Institute (HIRI) provides useful data on housing market trends and how they are impacting demand within the home improvement industry. In particular, HIRI's monthly Economic and Industry Update curates data on a variety of key economic indicators, including housing market trends, and examines their influence on the demand for home improvement and building products.

How does the cost of materials affect home improvement projects?

The cost of materials has a notable impact on home improvement projects in numerous ways. As the price of products and materials rise, whether it be from regional demand, supply chain issues, or other economic pressures, it can influence homeowners to reduce project budgets, decrease the scale and scope of their project, or even decide to delay or postpone projects. This is especially true for project categories where the cost of materials consumer a larger part of the budget, as opposed to labor costs. Additionally, heightened materials costs can drive homeowners to focus more on necessary maintenance and repair projects, rather than discretionary activities. The Home Improvement Research Institute's monthly Economic and Industry Update includes data on the size of the home improvement products market in the U.S., along with other key economic indicators to understand their influence on the home improvement market. Additionally, HIRI's biennial Project Decision Study and quarterly Homeowner Project Activity Tracker explore how homeowners are responding to shifting dynamics in the home improvement market, including the cost of building products and materials, and how that's impacting their completion of projections and future plans.

What are the key economic indicators I should be tracking to understand the health of the home improvement market?

There are several key economic indicators you should be tracking to understand the health of the home improvement market. Some of those indicators include Gross Domestic Product (GDP), Personal Consumption Expenditures (PCE), the Leading Economic Index (LEI), Real Disposable Personal Income (RDPI), monthly retail sales of building materials, unemployment rates (in general and within the construction industry), household formations, homeownership rates, the Consumer Price Index (CPI), the Consumer Confidence Index (CCI), Contractor Business Confidence (CBC), the Housing Market Index (HMI), Freddie Mac's Mortgage Rates, the Median Sales Price (MSP) of houses in the U.S., the Home Price Index (HPI), the Housing Affordability Index (HAI), number of building permits issues, single- and multi-family housing starts, and the National Association of Realtors' Pending Home Sales Index (PHSI). All of these factors shed light on the current health and future outlook of the home improvement market. You can find data on these and other economic indicators in the Home Improvement Research Institute's monthly Economic and Industry Update, which compiles a wide array of public information into a singular valuable source for members.