Demand for home improvement jumped in the last two years and that rising demand ignited price increases. Then, along came inflation.
Home Improvement Spending Jumped +28% from 2020
According to a recent report from Angi, formerly Angie’s List, spending on home improvement jumped +28% from 2020.
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Average spending on home upgrades is now the highest since Angi began tracking this data seven years ago. The average spending on 3.7 projects during the year of 2021 was $10.636.
Mischa Fisher, chief economist with Angi, said, “With an increased focus on the home due to the pandemic, home prices are rising to the highest on record (nearly +20% y/y), and materials prices in some cases are +400% higher or more than their pre-pandemic levels, the major growth in total consumer spending on home improvement should not come as a surprise.”
Future of Home Remodeling
Harvard/s Joint Center for Housing Studies projects that prices in home improvements/upgrades will see a big hike in the first two quarters of 2022 and then decelerate mid-year.
Abbe Will, the associate project director of the Remodeling Futures Program at HJCH, said, “The rising costs of labor and construction materials, difficulty retaining contractors and climbing interest rates could discourage owners from undertaking new or larger remodeling projects.
Home Furnishing Prices Climb +19.9% Y/Y
Prices for all home furnishings increased +1.6% m/m in January and +19.9% y/y, according to the latest CPI – Consumer Price Index released by the US Department of Labor. Take a look at the specifics of home furnishings price increases:
– Floor Coverings: +0.8% m/m; +7.2% y/y
– Window Coverings: +1.8% m/m; +16.2% y/y
– Furniture/Bedding: +2.4% m/m; +17% y/y
– Bedroom Furniture: +1.8% m/m; +13.7% y/y
– Clocks/Lamps/Accessories: +2.7% m/m; +6.3% y/y
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Thanks to Angi and CNBC.
