Fewer homeowners are remodeling, but demand is still ‘solid’

Fewer homeowners have been taking on remodeling projects, reports show. But don’t mistake it for a slow market.

The Leading Indicator of Remodeling Activity, an outlook measuring home improvement and repair spending on owner-occupied homes, slid 1.2% in the first quarter of 2024 compared to the prior quarter.

The NAHB/Westlake Royal Remodeling Market Index by the National Association of Home Builders reflects a similar decline. 

However, the RMI is still in territory where more remodelers see the conditions as “good” rather than “poor,” said Robert Dietz, chief economist of NAHB. More here: (Source)

The S/M Take: 

Don’t look now, but that sounds like optimism.

A few years after the pandemic spurred a massive amount of remodeling by the stuck-at-home, we’ve arrived at our next moment. The narrative goes like this: “We’ve done the big stuff, and with interest rates still high, we’re staying put. So let’s do the smaller stuff, but not TOO much – because labor and materials are still expensive.”

From a marketing perspective, this is the perfect chance to meet these modest expectations head-on, with realistic strategies and creative that encourage measured, affordable steps.

Curious where these conservative dollars are going? Find a wealth of detail right here.

How the home improvement industry is approaching sustainability in an uncertain climate

It’s hard to ignore that every year, our summers seem to be warmer and our winters shorter. Like it or not, climate change, the gradual warming of the earth due to trapped CO2 in the atmosphere, is upon us. According to an analysis done by Carbon Brief, of the 504 extreme weather events studied from the past 20 years, 71% were more likely or made more severe by human-caused climate change.

From extreme temperatures and wildfires to flooding and hurricanes, climate change will impact us all in some way. Because of this, builders and manufacturers are adapting, especially in the way we build our homes. More here: (Source)

The S/M Take: 

Sustainability is a bit like following the speed limit – you know you should, but if others don’t, why bother? It’s a concept we explore in Luxury Reimagined, our latest research and report viewable here, where we reveal that “selfish sustainability” has become the prevalent notion among the affluent.

What will elevate sustainability to a marketing headline, instead of just a messaging point? Pressure. Not just from end-users, but from the channel, as demonstrated by Lowe’s with this initiative.

Beyond Lowe’s, what professions, cohorts, and geographies are leading the march to sustainability? The NKBA dives deep in its 2024 report, and you can find the highlights here.

We actually need to build more luxury homes – Here’s why

There is broad agreement that the US housing market needs more homes. There is also broad agreement that affordability needs to improve. But it doesn't necessarily follow that we should build more affordable homes.

Stepping up housing production is a multiyear process, which means we should be thinking about what the market will look like in 2030, not what it looks like now. By then, middle-aged millennials in America’s largest generation will be at their peak earning potential, seeking luxury digs or to trade up rather than entry-level or affordable homes. More here: (Source)

The S/M Take: 

With a multimillion-unit shortage of affordable homes, this may not be the most conventional take. 

But before you judge, allow the math to work. Truth is, the industry needs to skate to where the puck is headed, and that’s to luxury for all the reasons stated above. Heartless? Not at all – a healthy trade-up market frees affordable homes for younger buyers. You know, like it used to be.