As borrowing costs remain high and the housing market recovery lags, Americans are postponing their home renovation plans and seeking more budget-friendly options.
Leading home improvement retailers, Home Depot and Lowe’s, have recently reported that consumers are spending less on high-cost projects that often require financing.
This trend contrasts with the early pandemic days when ultra-low interest rates fueled housing sales and remodeling spending. With current high rates, more homeowners are choosing to stay in their homes.
A quarterly survey from John Burns Research and Consulting revealed that homeowners who are renovating are looking for less expensive options in categories such as:
Matt Saunders, senior vice president of building products research at John Burns, stated, “These downgrades are becoming more common with cost-conscious consumers.”
Researchers from Harvard University’s Joint Center for Housing Studies predict a 7% drop in total spending on home improvement and repairs in the third quarter of this year, amounting to $451 billion.
Abbe Will, associate project director of the Remodeling Futures Program, attributed this decline to homeowners being “pinched by high costs” and the extreme inflation in building materials and skilled labor costs.
Tim Poterek from West Branch, Mich., is one of many homeowners reassessing their renovation plans. Instead of replacing his shower stall, which was beyond his budget, Poterek turned to DIY Facebook groups for assistance in repairing it.
“To repair [the shower stall], it’s probably going to cost me about $25 to $30 thanks to the people that offered me some suggestions,” Poterek said.
Despite the current slowdown, some industry experts believe the lull in renovations may be short-lived.
As Matt Saunders noted, “We think in the back half of the fourth quarter of this year is when we’ll start to see remodeling grow again.”
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