Home Improvement Spending Plummets for the First Time Since 2009

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Americans are witnessing a historic shift. Home improvement and repair spending is set to decline for the first time since the dark days of 2009. This year, an estimated $449 billion will be spent on house renovations, a significant drop from the record $481 billion spent in 2023. Rising prices for home improvement projects and elevated interest rates are pushing this decline. While $449 billion is still about $125 billion above 2019 pre-pandemic levels, the trend is alarming.

House renovations are rapidly becoming a luxury. The median US home sale price hit a new record of $433,558 in April, making it clear that the cost of maintaining and upgrading homes is skyrocketing. Excess savings from the pandemic era are depleting, further fueling the decline in renovation spending.

  • Americans are expected to spend $449 billion on renovations in 2024, down from $481 billion in 2023.
  • The median US home sale price reached $433,558 in April, a new record.
  • Real Residential Construction Spend Index experienced a decrease in March, standing at 103.17.
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The Real Residential Construction Spend Index, adjusting for inflation, shows spending hasn’t surpassed 2006 levels. A sustained decline in this index signals a potential slowdown in construction activity, which could ripple across various industries and impact employment levels within the sector.

The once-booming home improvement sector is now teetering on the edge. If the trend worsens, we could see a dramatic reduction in construction activity, higher unemployment rates in the construction sector, and an even greater divide between those who can afford to maintain their homes and those who cannot. The golden age of home improvement appears to be fading, replaced by an era of financial strain and skyrocketing costs.

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Sources:

www.forbes.com/home-improvement/features/home-improvement-spending-decrease-bottoms-out/

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