Americans Are Cutting Back on Home Maintenance

Fewer Projects

The pandemic-era renovation boom appears to be winding down.

During and after lockdowns, many Americans leveraged their free time and stimulus checks to spruce up their living spaces. But annual spending on home renovations and maintenance peaked in Q3 2022, according to Harvard University’s Leading Indicator of Remodeling Activity . This same metric now projects that renovation spending will continue its decline by dropping more than 7% in Q3 2024.

Spending More

Despite taking on fewer renovations, homeowners are spending more on each project.

On average, homeowners tackled just 2.8 projects in 2023, down from 3.2 in 2022, according to home services marketplace Angi’s (ANGI) State of Home Spending Report . However, they spent an average of more than $9,500 on home improvements in 2023, up 12% annually.

This is a sign that homeowners are battling higher labor and construction costs, likely as a result of persistent inflation.

What Does This Mean?

This decline in activity doesn’t necessarily mean the remodeling market is grinding to a halt.

In addition to inflation, there are several other factors influencing this decline in spending; namely, high borrowing costs and low home sales. These forces make major investments in large renovation projects less appealing. With borrowing costs elevated, the terms of equity loans needed to fund these projects aren’t as favorable, and with sales lagging, a short-term return on an investment is unlikely.

That said, as many homeowners resolve to stay put until mortgage rates moderate, demand for smaller, quality-of-life remodeling projects remains high. For similar reasons, more may opt to spend on maintaining older properties, rather than selling them. In other words, American homeowners will continue to renovate, but likely out of necessity, rather than luxury.

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