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

Data from the recently released market forecast indicates standard activity levels as inflation spikes and households face reduced income growth

INDIANAPOLIS, Oct. 17, 2022 /PRNewswire/ -- 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 as a member at hiri.org.

About the Home Improvement Research Institute

HIRI is the leading nonprofit business organization for more than 100 of the biggest names in the home improvement industry. Our goal has always been to provide companies of all sizes with actionable resources ranging from raw data to digestible executive summaries to shape business decisions. Join as a member for unlimited access to $1 million worth of industry research. For more information, visit hiri.org.

SOURCE Home Improvement Research Institute (HIRI)