While the rate of home improvement activity in the U.S. has slowed since the height of the pandemic, the industry is expected to continue to see its market size rise from about $538 billion in 2021 to more than $620 billion by 2025.1 Sustainability and AI-driven home technology are expected to drive home renovations in 2024.2
Five industry trends that home improvement contractors should look for to help grow their business in 2024 are:
1. Impact of higher interest rates:
After soaring to 7.79% in October 2023 – their highest peak in more than 23 years – some analysts expect U.S. mortgage rates to ease back to the 6% range by the spring of 2024.3 However, the lingering impact of higher interest rates has contributed to a reduction in new housing stock and a related increase in new home prices.4
Key takeaway: With higher interest rates impacting new home prices, the home reno industry is expected to see continuing demand from homeowners who find it more affordable to renovate than to move.
2. Lower moving rates:
Despite many people choosing to relocate during the pandemic, the National Association of Realtors says the moving rate in the U.S. has declined in recent years.5 This may be partly due to a reluctance to move among those who have locked in low mortgages, at or below 3%.6 By staying put, they can avoid having to refinance at a higher rate. Also, home improvement industry stats show that those who have lived in their homes for over six years are more likely to renovate than move.7
Key takeaway: Small home improvement and home maintenance projects are predicted to be top of the list for those looking to stay in their home for an extended period.
3. Increase in remote work:
One of the lingering impacts of the pandemic is the increased number of employees who work from home. According to a 2023 research report, about a third of U.S. workers with jobs that can be done remotely now work from home full-time (up from only 7% before the pandemic).8
Key takeaway: With many homeowners finding remote work is here to stay, there is likely to be a continuing demand for remodeling projects that convert existing spaces into home offices.
4. AI-powered home upgrades:
Smart homes are getting even smarter. AI-powered home automation systems using tools like ChatGPT are integrating new technology into heating, cooling, electricity and security systems, and helping reduce energy use.9
Key takeaway: Home renovations that incorporate recent enhancements in AI-driven home technology are expected to be a leading trend in 2024.10
5. Home improvement tax credit:
The Energy Efficient Home Improvement Credit, which became effective January 2023, provides homeowners with up to $3,200 in tax credits for making qualified energy-efficient home improvements.11
Key takeaway: Homeowners looking to save money while improving the energy efficiency of their homes are likely to be eager to make upgrades in 2024 that are eligible for the government tax credit, particularly if they can be combined with affordable financing.
Learn how Aqua’s competitive consumer financing can help advance your business in the year ahead. Contact us today at:
800-234-3663, option 4, ext. 6094