The FinMkt Blog
"State of Home Spending" Report for 2023

"State of Home Spending" Report for 2023

Angi's recently released "State of Home Spending" report for 2023 reveals a notable uptick in expenditures on home improvement projects. Despite concerns about escalating mortgage rates and economic uncertainties, homeowners demonstrated a heightened commitment to enhancing and maintaining their living spaces throughout the year.

The report, which delves into patterns of spending, prevalent motivations, and emerging trends in home services, underscores the predominant drivers behind this year's increased spending. Homeowners primarily sought to preserve the condition of their residences and align them more closely with their current lifestyle needs. Those who undertook home projects in the past year allocated an average of $13,667 to home improvement, maintenance, and emergency repairs—an impressive 6% surge compared to 2022—across an average of 11.1 projects.

Crucially, the report identifies rising mortgage interest rates as a significant factor shaping individuals' perspectives on home improvement endeavors in 2023. A substantial 40% of homeowners attributed their heightened investment in home projects to the less appealing prospect of relocating or finding a new home amidst high interest rates. Looking ahead, 30% of homeowners express intentions to prioritize additional home projects in 2024 rather than considering a move.

Angie Hicks, Chief Customer Officer at Angi, commented on the findings: "While some anticipated a shift in spending away from homes with the easing of pandemic-era restrictions, homeowners continue to demonstrate their affection for their living spaces by investing in them. The trend in home services spending, established during the pandemic, persists as our homes play an evolving role in our daily lives. This year's report sheds light on the enduring reasons behind homeowners' commitment to home improvement, maintenance, and repair work."

Angi, with its extensive involvement in assisting millions of individuals in completing home projects, offers unique insights into homeowners' behaviors related to home improvement. The annual report provides an in-depth analysis of spending trends, key drivers, obstacles, prominent projects, and forecasts for the years to come. Key highlights from this year's report include:

**Total average spending across all home spending categories (improvement, maintenance, and emergencies) in 2023 reached $13,667, marking a 6% increase from 2022 across an average of 11.1 projects.

**COVID-19 is no longer the predominant reason for project delays, down 55% compared to the previous year. Issues such as permitting delays and material shortages, which had impacted home improvement projects in recent years, are less prevalent this year. Design choices, rather than material prices or shortages, were cited as the core reason for exceeding project timelines or budgets.

**Millennials emerged as the leading age group in terms of spending in 2023, allocating an average of $16,136 for home improvement, maintenance, and repairs combined. In contrast, Baby Boomers and the Silent Generation spent comparatively less across all categories.

**The top three projects this year were regular maintenance (39%), including tasks like lawn care and gutter cleaning, followed by interior painting (30%) and new appliance installation (27%). Bathroom remodels dropped to the fourth position at 26%, breaking a two-year streak in the top three most popular projects.

**The primary motivator for home improvement projects in 2023 was to maintain the condition of the home (35%), followed by the desire to adapt the home to lifestyle and needs (23%). Notably, return on investment (ROI) accounted for only 5% of American homeowners' top motivations. This marks the fourth consecutive year in which ROI as the primary motivator has declined.

Summary

Angi's "State of Home Spending" report for 2023 offers a comprehensive insight into the evolving landscape of homeownership and the thriving home improvement industry. Despite concerns surrounding rising mortgage rates and economic uncertainties, homeowners have exhibited a remarkable commitment to enhancing and maintaining their living spaces throughout the year. The report's findings highlight a significant 6% surge in average spending on home improvement, maintenance, and emergency repairs compared to the previous year, signaling a robust market.

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