Home Improvement Spending Expected To Drop By Over $30 Billion In 2024, But It May Bottom Out By The Year’s End

According to the report, home improvement spending was on a steady incline from Q1 of 2021 until Q3 of 2023, rising from $371 billion to $490 billion where it topped out in Q3 of 2023. Since then, home improvement spending has been on what appears to be a steady decline.

Joint Center for Housing Studies of Harvard University

That said, this decline is more of a return to what normal spending would have looked like, had the pandemic not happened, rather than a true decrease in spending. The height of the Covid-19 pandemic, and the subsequent years following, were accompanied by record-high inflation rates as well as a labor and materials shortage, which all led to a rapid increase in home renovation spending.

As individuals adjusted to being at home around the clock, many decided to take on improvement projects to make the transition more comfortable and produce more livable homes, but because of all of these factors, the cost to take on home improvement projects was much higher than usual. That is to say that the increase in spending we saw during Covid-19 likely wouldn’t have happened organically, so the decrease in spending over the last few years is a reflection of returning to normal spending habits.

Carlos Martín, project director of the Remodeling Futures Program at the Joint Center, said in the report that other factors beyond the impact of the pandemic are continuing to drive home improvement spending downward, namely the following:

• Steep costs to complete home improvement projects
• Heightened interest rates
• Lacking home sales

Deane Biermeier, resident Forbes Home expert and former general contractor, echoed Martín’s claim that high interest rates are the current main driver of the decrease in spending:

“Interest rates appear to be the most significant driving force for the large-project remodeling slowdown,” Biermeier said. “However, many homeowners who are planning to wait out interest rates in their current homes are still spending money on smaller renovations and upgrades to create a more comfortable living space.”

Biermeier told Forbes Home that he also thinks home improvement spending will continue on a downward trend throughout 2024, but by the end of the year it could begin to moderate as mortgage interest rates begin to decrease slightly.

“Whether or not it’ll be enough for homeowners to move or take on equity loans to fund large remodels remains to be seen,”  Biermeier said.

So what does this mean for taking on your own improvement projects? Is now a good time to remodel? Biermeier told Forbes Home, “While now may not be a great time to take on a lot of debt to tackle a massive remodeling project, smaller projects are still popular and worthwhile.”

Especially now, as high mortgage rates are prompting a lot of would-be homebuyers to stay in their current residences, rather than try to purchase something else, it could be worth it to take on some lower-budget projects that can still help wildly improve the look and function of your home.

Additionally, taking on these smaller-budget, yet high-ROI projects now is a great way to utilize this time. That way when mortgage rates do inevitably lower, and many individuals feel more comfortable buying again, your home will be ready to sell, potentially for a higher price than if you didn’t take this time to make these improvements.

If high interest rates are prompting you to stay in your current home, you’re not alone. For many individuals, now doesn’t feel like the best time to sell and look for something new, but that doesn’t mean you need to keep your home as-is if it’s not functioning in a way that truly serves you and your family. Thankfully, there are a variety of impactful home renovations you can take on right now that will help your space look and feel better, while not breaking the bank.

1. Refinish Hardwood Floors

Getty Images

If your hardwood floors have seen better days, but you don’t want to pay the price to fully replace them, refinishing is a great option. Refinishing hardwood floors can be a challenging and time-intensive task, but it doesn’t necessarily have to be costly. When carried out by professionals, the overall cost of refinishing, which includes sanding and staining, typically ranges from $3 to $8 per square foot. Opting for a do-it-yourself approach can reduce the expense to around $500 to $1,000 (excluding the cost of machinery).

2. Replace Kitchen Countertops

Getty Images

Even if a full kitchen remodel may not be in the budget right now, there are several smaller projects to make your kitchen look and feel brand new, one of which is replacing the countertops. Opting for ceramic or porcelain tile proves to be a cost-effective choice, ranging from $5 to $30 per square foot. This option is DIY-friendly as long as you’re willing to invest the time for installation and upkeep. Laminate countertops, although slightly pricier at an average of $25 per square foot, are sold in a versatile selection of colors and styles, so you’ll likely be able to find something to suit your design aesthetic.

3. Upgrade Kitchen Appliances

Getty Images

Upgrading essential kitchen appliances such as refrigerators, stoves and dishwashers can be fairly affordable. Depending on the brand, the time of year that you purchase and any discounts available for purchasing multiple appliances at once, you can save up to $1,500 just by being strategic and asking the right questions. Consider asking to buy a floor model and don’t forget to shop around for the best price. If you find a cheaper price elsewhere, keep in mind that many retailers will be willing to price match.

4. Replace a Shower

Getty Images

Does your bathroom feel dull or outdated? Bring it new life by replacing your shower. For an all-in-one easy solution, prefabricated shower kits are available and have all the necessary components for assembling a complete shower. These can be purchased for around $1,000 or less. Looking for some inspiration? These walk-in shower before and afters are sure to help you plan your own shower remodel.

5. Add a Fresh Coat of Paint

Getty Images

Changing the look and feel of your house may be as easy as updating the exterior with some new paint. The cost for professional exterior painting of a two-story house typically starts at around $3,000. If you choose to do it yourself, expect to pay between $500 and $1,000, taking into account the size of your house and the necessary supplies. If you’re not ready to tackle the entire paint job, you might opt for repainting just the trim. This alternative is more affordable and requires less effort but can still make a big impact when it comes to freshening up the look of your home.

NOTE: Without the proper time, tools and expertise, exterior house painting can be a dangerous task as it involves being high up on a ladder. If you don’t feel safe or comfortable tackling this project alone, we recommend hiring a professional painter to do this job for you.

General home renovation spending is expected to remain on a decline throughout most of 2024 due to steep renovation costs, high interest rates and decreasing home sales, it is expected this will bottom out by the year’s end. That said, while now might not be the best time to try to move or to take on any large-scale, high-budget home renovation projects, there are many low-cost ways to make your home look and feel better suited for your needs during this time.