• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick Forget a new bathroom, just fix the faucet: Consumers take a break from home renovations
Editor's Pick

Forget a new bathroom, just fix the faucet: Consumers take a break from home renovations

by February 29, 2024
by February 29, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Households are hitting pause on their tub-to-shower conversion plans and buying new shower curtains instead.

After a pandemic-era renovation craze, the nation’s two largest home improvement retailers say customers are spending less on big projects in favor of cheaper do-it-yourself fixes.

Lowe’s said this week that it’s seeing shoppers cut back on kitchen and bathroom purchases and becoming more cautious about buying big-ticket appliances.

“Those who did engage in home improvement activities took on smaller, nondiscretionary projects with a heightened focus on value,” Lowe’s CEO Marvin Ellison told investors when the company reported its fourth-quarter earnings Tuesday. Sales dropped 6.2% compared to a year ago, which the retailer blamed on “persistent inflation and a stagnant housing market.”

A week earlier, Home Depot, the largest U.S. home improvement chain, reported its own sales dip, declining 3.5% in the fourth quarter from the year before.

“Major home renovation projects are on hold as consumers watch their finances, but they still have an appetite for lower-cost improvements they can do themselves,” said Joe Derochowski, home industry adviser at the market data company Circana.

Rising prices appear to be the main reason for consumers’ home renovation pullback. Circana data shows retail sales revenue for kitchen and bath projects declined just 1% from 2020 to 2023 — but unit sales were down 25% over that period, suggesting customers’ budgets are stretching across fewer items thanks to inflation.

The pace of consumer price increases has slowed dramatically, with the annual rate landing just above 3% last month after peaking over 9% in mid-2022. But after three straight months of improvement, consumer confidence ticked down in February, with a slight dip in household expectations for making large purchases in the next six months.

Home improvement spending has been cooling for months, Lowe’s and Home Depot have said, after a frenzy to upgrade both newly purchased homes and those where people suddenly found themselves spending more time together during Covid lockdowns.

But while the action has died down, households appear to be deferring, not ditching, their more ambitious renovation projects.

They didn’t imagine that a bathroom might cost 20, 30 grand to remodel.

Contractor Emmanuel Forge

Home Depot Chief Financial Officer Richard McPhail told analysts last week that business is dragging “at a lesser degree than we faced in 2023,” adding that “our market is on its way back to normal demand conditions.”

Derochowski expects many consumers to revisit their pricier plans later in 2024. “There is pent-up demand that will bring opportunity for spending on larger home improvement projects over the coming year as the economy improves,” he said.

Emmanuel Forge, a traveling contractor who posts home-renovation advice on TikTok and Instagram under his Remodel School brand, said he’s had no trouble finding work lately. But he said many homeowners underestimate how much projects cost, and some abandon their aspirations after doing the math.

“They didn’t imagine that a bathroom might cost 20, 30 grand to remodel,” Forge said. “They thought it might be five grand and a weekend or two.”

Contractors’ and home improvement retailers’ businesses are closely tied to the housing market.

As 30-year fixed mortgage rates dipped below 3% in 2020, existing home sales soared to an adjusted annual peak rate of 6.6 million, according to the National Association of Realtors. Americans poured money into fixing up their properties at the same time. Comparable sales skyrocketed 29% at Lowe’s and 25% at Home Depot in the fourth quarter of 2020.

But as the Federal Reserve lifted interest rates to more-than-20-year highs to quell inflation, mortgage rates rose, too. By the end of last year, 30-year rates flirted with 8%, cooling existing home sales to an annual rate of around 4 million, as more would-be buyers held back. Fewer home sales means fewer homeowners looking to renovate.

Materials costs have risen in recent years, driven up by the supply chain snags of 2021 and 2022, and labor costs have soared as well. Average hourly earnings for specialty trade contractors jumped 16% from December 2020 to December 2023, keeping pace with the increases all workers saw during that period, according to the Bureau of Labor Statistics.

The higher costs are one reason Forge said he could see homeowners opting not only for smaller projects but ones they can tackle on their own.

“Maybe instead of them buying $3,000 of cabinets to install themselves, they’re just going to paint them with $300 of paint,” he said.

This post appeared first on NBC NEWS
You Might Also Like
  • Walmart is getting a bump from a surprising cohort: Wealthier shoppers
  • BP becomes latest to pause Red Sea shipments as Houthi attacks continue
  • McDonald’s Snack Wrap is officially making a permanent return
  • Why the ‘wealth transfer’ from boomers to their heirs won’t be as large as expected
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Former FTX chief Sam Bankman-Fried seeks no more than six years in prison as sentencing trial awaits
next post
House Republicans tout new bill as ‘strongest’ anti-CCP measure in history

You may also like

Fox streaming service to be called Fox One, launch before...

May 13, 2025

Amazon Web Services CEO Adam Selipsky to step down

May 15, 2024

Robinhood app says SEC dismissed crypto investigation in sign of...

February 24, 2025

WeightWatchers CEO apologizes to body positivity influencer after Oprah special...

March 25, 2024

Target CEO addresses price gouging accusations in retail

August 22, 2024

BP becomes latest to pause Red Sea shipments as Houthi...

December 20, 2023

Dow rallies more than 500 points to record, closes above...

December 14, 2023

Antiwork trends like ‘lazy girl jobs’ show how young people...

August 3, 2023

YouTuber Mr Beast sued by Mr Beast Burger food delivery...

August 9, 2023

Netflix kills off cheapest no-ads plan in the U.S. and...

July 20, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters renovation

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025
    • OpenAI to release web browser in challenge to Google Chrome

      July 10, 2025
    • Sports executive charged with bid-rigging in Texas arena project

      July 10, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,631 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,919 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,607 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,577 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,449 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters...

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Lawmakers ask Mark Zuckerberg to show...

    August 16, 2024

    Shredded cheese recall over listeria concerns...

    March 9, 2024

    Disneyland characters and cast members attempt...

    April 19, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here