The Home Improvement Research Institute Predicts National Inflation Bulge Will Decelerate Home Improvement Spending Through 2024

The Home Improve­ment Research Insti­tute, the nation’s lead­ing resource for mar­ket research con­cern­ing the home and build­ing prod­ucts indus­try, has fore­cast­ed the cur­rent nation­al infla­tion bulge to con­tin­ue to decel­er­ate home improve­ment spend­ing. Growth in the total home improve­ment prod­ucts mar­ket is expect­ed to decel­er­ate from 7.2% in 2022 to 1.5% in 2023, with the con­sumer mar­ket grow­ing by 0.6% and the pro­fes­sion­al mar­ket grow­ing by 3.6%. This research was released to HIRI mem­bers in Sep­tem­ber in the bian­nu­al Home Improve­ment Prod­ucts Mar­ket Forecast.

Impact of Inflation

Recent home improve­ment prod­uct mar­ket growth appears to have peaked in 2021 at 15.8%, dri­ven by surges in demand for home ren­o­va­tion dur­ing the height of the COVID-19 pan­dem­ic. Today, ris­ing prices on core per­son­al con­sump­tion expen­di­tures are erod­ing house­holds’ real income growth and slow­ing con­sumer spend­ing, includ­ing on home improve­ment projects. While wages across the nation are slow­ly increas­ing, they have not yet out­paced the impacts of inflation.

HIRI pre­dicts that core prices will con­tin­ue to rise, at least in the short term. A soft­en­ing in demand is expect­ed to ease price pres­sures over the com­ing months, and core PCE prices are expect­ed to decline slow­ly over the next year. 

“After two years of dou­ble-dig­it growth in the home improve­ment mar­ket, eco­nom­ic pres­sures are expect­ed to slow cat­e­go­ry activ­i­ty next year,” said HIRI Oper­a­tions Direc­tor Pam Hei­del. ​“How­ev­er, the mar­ket is still expect­ed to grow, which is good news for our industry.”

Consumer Market

Con­sumer growth is expect­ed to slow con­sid­er­ably in 2023 giv­en that many home­own­ers recent­ly brought ren­o­va­tion projects to com­ple­tion dur­ing the pan­dem­ic. HIRI esti­mates con­sumer mar­ket sales to advance by 0.6% in 2023 to $386 bil­lion and for growth to aver­age 2.2% 2024 – 26.

HIRI fur­ther breaks down this fore­cast­ed growth by prod­uct cat­e­go­ry, where it can be assumed that many prod­ucts sought out at the con­sumer lev­el are relat­ed to DIY projects.

Top-grow­ing mer­chan­dise lines for consumers

Nom­i­nal dol­lar growth rates between 2022 and 2026:

• Lawn and gar­den equip­ment and sup­plies: 4.8%
• Nurs­ery stock and soil treat­ments: 4.0%
• Paint and preser­v­a­tives: 3.8%
• Roof­ing and sup­plies: 3.7%
• Gyp­sum and spe­cial­ty boards: 3.6%
• Soft-sur­face floor cov­er­ings: 3.6%
• Hard-sur­face floor cov­er­ings: 3.2%

Professional Market

HIRI projects pro­fes­sion­al mar­ket sales will grow by 10.2% in 2022 and slow to 3.6% in 2023. As pan­dem­ic-dri­ven demand eas­es over the com­ing years, growth of pro­fes­sion­al mar­ket sales is expect­ed to aver­age 3.2% 2024 – 26.

The most in-demand projects requir­ing pro­fes­sion­al con­trac­tors can be pre­sumed by the growth of spe­cif­ic cat­e­gories over the com­ing years.

Top-grow­ing mer­chan­dise lines for professionals

Nom­i­nal dol­lar growth rates between 2022 and 2026:

• Roof­ing and sup­plies: 7.5%
• Gyp­sum and spe­cial­ty boards: 7.3%
• Hard-sur­face floor cov­er­ings: 6.8%
• Lawn and gar­den equip­ment and sup­plies: 6.0%
• Kitchen and bath cab­i­nets: 5.9%
• Win­dows, sky­lights and patio doors: 5.9%
• Insu­la­tion and weath­er­iza­tion prod­ucts: 5.9%

“It’s impor­tant to keep up with past and future home improve­ment data because it helps remind our indus­try of the big pic­ture,” Pam Hei­del said. ​“No mat­ter which direc­tion things may be turn­ing, HIRI will sup­ply the research need­ed to help our mem­bers make informed decisions.”

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 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 home improve­ment data to help guide busi­ness decisions.

Learn more and join HIRI today.