The Home Improvement Research Institute, a national resource for market research concerning the home and building products industry, has forecast home improvement spending will pick up in 2024 following two years of decelerated growth. The total home improvement products market is expected to climb 2.7 percent in 2024, with the consumer market growing by 3.3 percent and the professional market growing by 1.4 percent.
Economic Indicators
After two years of double-digit growth in the home improvement market, economic pressures slowed category activity from 2022 to 2023. Today, consumer sentiment continues to rise with disposable income and equity gains, which has buoyed consumer spending on home improvement. Additionally, the Federal Reserve is expected to lower interest rates in 2024, which will provide tailwinds for home improvement spending.
“Traditionally, home sales drive spending on home improvement. However, with the high interest rates of recent years, homeowners embraced the ‘locked-in effect,’ choosing to remodel rather than sell,” said Dave King, executive director at HIRI. “As interest rates decline, we anticipate a return to home sales as the primary motivator for home improvement.”
Consumer Market
Real disposable income is projected to grow by 2.8 percent and real personal consumption expenditures by 2.6 percent in 2024. HIRI projects consumer market sales will increase 3.3 percent in 2024 to $392.6 billion and for growth to average 3.1% 2026–2028.
HIRI further breaks down this forecasted growth by product category.
Top-growing merchandise lines for consumers:
- Soft-surface floor coverings
- Hard-surface floor coverings
- Other building materials
- Paint and preservatives
- Roofing and supplies
These merchandise lines will see compound annual growth rates between 3 and 6 percent in 2025 through 2028.
Professional Market
HIRI forecasts professional market sales will grow at a slower pace than sales among consumers, but still increase 1.4 percent in 2024. Additionally, HIRI projects home sales will pick up 6.3 percent in 2024 following a decline of 19.3 percent in 2023. Due to this rebound, growth in professional market home improvement sales is expected to accelerate faster by 2025 and to average around 6 percent CAGR in 2027 and 2028.
Top-growing merchandise lines for professionals:
- Lawn and garden equipment and supplies
- Nursery stock and soil treatments
- Tools
- Hardware
- Major household appliances
These merchandise lines will see CAGR between 4 and 5 percent in 2025 through 2028.
“While there will always be uncertainty in the economy, HIRI’s goal is to supply the research needed to help our members make informed decisions,” King said.