8 Top Trends in Homeowner Readiness to Spend on Home Improvement Projects in 2024

The year 2023 was a bit of a rough one for the home improve­ment indus­try. Both pro­fes­sion­al and con­sumer mar­kets for var­i­ous prod­uct cat­e­gories were hit with neg­a­tive growth. Spend­ing slowed.

We’re start­ing to see signs of recov­ery in 2024, but we also can’t be too quick to dis­miss the uncer­tain eco­nom­ic envi­ron­ment and per­va­sive con­cerns about infla­tion that are affect­ing home­own­ers across the country. 

Accord­ing to data from our recent study on Spend­ing Pat­terns in a Chang­ing Mar­ket: Home Improve­ment Trends Dur­ing and Post Pan­dem­ic, about 65% of home­own­ers list­ed infla­tion as one of their biggest con­cerns over the past 12 months. Anoth­er 57% cit­ed the econ­o­my, in general.

These finan­cial and eco­nom­ic con­cerns have a direct impact on home­own­ers and how they feel about under­tak­ing new home improve­ment projects, as well as their approach to spend­ing and hir­ing pro­fes­sion­als for such activities.

What Trends are Driving Homeowner Readiness in the Home Improvement Industry?

Infla­tion, ris­ing remod­el­ing costs, and stag­nat­ed incomes are influ­enc­ing home­own­er readi­ness with­in the home improve­ment indus­try in 2024, although not equal­ly across the board. Cer­tain demo­graph­ics remain inter­est­ed and eager to take on new projects, while oth­ers are more hes­i­tant or might choose small­er DIY projects instead of large-scale remod­els and renovations. 

Here is a look at some of the top trends that con­tin­ue to shape home­own­ers per­spec­tives on home improve­ment in 2024: 

1. Increasing Home Renovation Costs Lead to More DIY

Ren­o­va­tion and remod­el­ing costs remain high in 2024 as a result of steep prices for raw mate­ri­als, vari­a­tions in the labor mar­ket, and gen­er­al infla­tion. We’ve seen how this trend influ­ences the behav­iors and deci­sions made by homeowners. 

For small projects, home­own­ers sim­ply tend to use less expen­sive mate­ri­als. Look­ing for­ward, they plan to under­take more DIY projects — espe­cial­ly for those in the less-than-$5,000 range — and only uti­lize con­trac­tors for larg­er-scale projects. How­ev­er, despite a roll­back in numer­ous dis­cre­tionary cat­e­gories, home­own­ers still plan to spend about the same or more — rather than less — on home improve­ment, while depri­or­i­tiz­ing home goods and décor, going out to eat, enter­tain­ment, and vacations.

2. The Home Improvement Market is Slowly Increasing

The home improve­ment mar­ket expe­ri­enced a spike in growth in 2020 and 2021, and then sharply declined the fol­low­ing year. After a small drop of 1.5% in 2023, we are start­ing to see a lit­tle growth this year, accord­ing to HIRI’s Month­ly Eco­nom­ic and Indus­try Update from June 2024. That growth should con­tin­ue steadi­ly from 2025 to 2028, result­ing in a rough­ly $642.3 bil­lion home improve­ment prod­ucts mar­ket by the end of the fore­cast­ed peri­od. The pro­fes­sion­al mar­ket was hit hard­est in 2023, but is expect­ed to increase steadi­ly dur­ing the next cou­ple of years.

3. Household Income Drives Home Improvement Spending

House­hold income is one of the best indi­ca­tors of home improve­ment spend­ing. In the past few years, low­er- and mid­dle-income house­holds had dis­cre­tionary income and were able to secure financ­ing with low­er rates. How­ev­er, the mar­ket has dras­ti­cal­ly shift­ed in the past year and near­ly all home­own­ers are feel­ing the impacts of infla­tion. The new eco­nom­ic envi­ron­ment sees high­er inter­est rates for low- and mid­dle-income home­own­ers, who are simul­ta­ne­ous­ly expe­ri­enc­ing steady or wors­en­ing incomes, sav­ings account bal­ances, and dis­cre­tionary income. 

As a result, low­er- and mid­dle-class house­holds are tight­en­ing their belts. On the oth­er hand, high­er-income home­own­ers plan to ramp up their spend­ing in the next year as they have the reserves to do so.

4. Demand for a Change in Housing is Building Among Homeowners

A major­i­ty of home­own­ers would poten­tial­ly be inter­est­ed in mov­ing to a new house, if inter­est rates and avail­abil­i­ty were to improve. A quar­ter of them are cur­rent­ly locked into their exist­ing home, hav­ing secured a mort­gage rate low­er than 3%; they are hes­i­tant to give that up. This group of home­own­ers is unlike­ly to move unless mort­gage rates once again reach a low-enough per­cent­age, or less than 4%, accord­ing to HIRI’s research. 

In terms of demo­graph­ics, our research shows that those who are like­ly to move skew younger (ages 25 to 44) and high­er income (upward of $80,000). Mean­while, old­er home­own­ers, who’ve been in their homes for 20-plus years, are con­tent to stay put.

5. Previous Expenditures are a Predictor of Future Projects

The largest pre­dic­tor of future home improve­ment spend­ing is pre­vi­ous expen­di­tures, and there’s a notice­able rela­tion­ship between home­own­ers who feel locked into their cur­rent hous­ing sit­u­a­tion and what they’re will­ing to spend on home improve­ment. Accord­ing to our Spend­ing Pat­terns in a Chang­ing Mar­ket report from June, ​“locked in” home­own­ers have spent an aver­age of approx­i­mate­ly $7,000 on home improve­ment in the past year — and they are antic­i­pat­ing to spend even more in the next 12 months.

6. Higher-income Homeowners May be Positioned to Sell

High­er-income home­own­ers — who’ve seen their take-home income and sav­ings improve over the past cou­ple of years — may have the oppor­tu­ni­ty to move soon­er and more read­i­ly than low­er- and mid­dle-class home­own­ers. In short, they have the means and moti­va­tion to do so. As they pre­pare their cur­rent homes for sale, they will be look­ing to com­plete home improve­ment and ren­o­va­tion projects. 

That being said, ​”prepar­ing a home for sale” as a moti­va­tion for under­tak­ing a home improve­ment project leads to an aver­age spend of less than $4,000. Home­own­ers tend to spend more on a project when it is moti­vat­ed by some­thing else, such as improv­ing qual­i­ty of life or prepar­ing to age in place.

7. Smaller Projects are More Feasible in 2024

About two-thirds of home­own­ers feel it’s a bad time to start a home improve­ment project that costs more than $5,000, giv­en their per­son­al finances and eco­nom­ic con­cerns. Addi­tion­al­ly, high-spend projects were twice as like­ly as small­er-scale projects to have been pulled for­ward dur­ing the pandemic.

Now, small­er projects — those that cost less than $5,000 — are more palat­able. In fact, about 70% of home­own­ers in 2024 feel that it’s ​“about the same” or even a ​“good time” to start a home improve­ment project under $5,000. How­ev­er, high-income own­ers are the excep­tion in 2024. They plan to spend more in the future, as there will be less com­pe­ti­tion in the mar­ket. They antic­i­pat­ed being able to com­plete their high-spend projects more eas­i­ly and conveniently.

8. Homeowners are Motivated by Enjoying Their Surroundings

The great­est moti­va­tion for under­tak­ing home improve­ment projects in the past 12 months was ​“to bet­ter enjoy” a home, fol­lowed by updat­ing the ​“home’s style.” How­ev­er, the high­est spend­ing is gen­er­al­ly tied to remod­el­ing projects, such as expand­ing a home to accom­mo­date a change in fam­i­ly size; increas­ing the val­ue of one’s home; and mak­ing a home more ener­gy efficient. 

These types of projects lead to an aver­age spend­ing of $7,000 to $10,000.

Gaining Insight into Homeowner Readiness Trends

To learn more about home­own­ers’ cur­rent per­spec­tives on home buy­ing and home improve­ment, as well as how finan­cial con­cerns post-pan­dem­ic influ­ence their incli­na­tion to take on new projects, down­load our Spend­ing Pat­terns in Chang­ing Mar­ket: Home Improve­ment Trends Dur­ing and Post Pan­dem­ic report from June 2024. As a mem­ber of the Home Improve­ment Research Insti­tute, you will gain access to not only this research, but oth­er data and insights on both pro­fes­sion­al cus­tomers and DIY con­sumers to help guide your busi­ness strate­gies in the com­ing year.