Market Trends March 2023
Home Improvement Sector Outlook
Many retailers and manufacturers in the home improvement sector issued cautious outlooks for 2023, but all remained very bullish on long-term prospects for industry.
They cited a chronic shortage of housing, with annual production as much as three million units below what is needed based on household formation rates, population growth and aging housing stock.
More than half of the existing homes in the US are more than 40 years old. Homeowners with low fixed-rate mortgages have an incentive to stay put and significantly improve their homes.
Working at home normalizing. The option to work at home that developed during the pandemic proved to be both popular and productive and many companies are now offering workers a hybrid schedule with fewer days in the office. People who have been “temporarily” making do with less-than-ideal office space at home want to create a more permanent and welcoming place to work.
Four-day work weeks give people another reason to improve their homes. Not that long ago long work weeks and even longer commutes cut into the amount of time people actually spent at home. Why do a bunch of improvements when you’re hardly ever there? But in addition to the normalizing of the hybrid work trend, two recent studies showed that going to a four-day work week made people happier and more productive. Surprisingly, they improved company productivity and profits as well as employee satisfaction and retentions. People spending more time at home have an extra incentive to improve their environment.
Workers everywhere are rebelling against requirements to spend more days in the office. Thousands of employees of Amazon and Disney are signing petitions asking their CEOs to reconsider and arguing the new policy will lead to mass resignations among valuable employees who joined the company in order to enjoy flex benefits and be able to work from home.
Better Homes and Gardens Institute and Martha Stewart Living and Anji recently reviewed the top kitchen trends for the year. Kitchen makeovers and remodels are perennial favorites, with 17% of homeowners surveyed by Anji planning to take on a kitchen remodel project next year. A kitchen remodel is one of the pricier projects on the list, with the typical cost running between $14,500 and $40,000. Some small-scale kitchen renovation ideas are much more affordable, including refinishing cabinets, updating appliances or installing new flooring, countertops, kitchen sinks and faucets. Among the most popular trends are:
Spaces that flow into each other. The trend to open kitchen design and multi-use is stronger than ever, with many designers now redesigning much of the first floor, including big pantries, mud rooms, dining areas and half-baths. People don’t want them to look the same, but they do want them to feel cohesive and flow together seamlessly.
Big Windows. New kitchens and remodels are now featuring huge windows and window walls that slide open or into pocket doors and merge the outdoor/indoor spaces, often connecting to outside dining, entertaining and even an outdoor kitchen.
Double the Appliances. Kitchen enthusiasts are opting for more than one of the fixtures and appliances they use most, so multiple family members can work in the kitchen at the same time. Even double-islands may make an appearance, with one designated for prep with a sink and perhaps a cook top and one for casual gathering and dining.
Quiet countertops, bold kitchen palettes. Kitchens are reportedly moving toward an earthier, darker, richer palette combined with light, natural woods, which calls for countertops that complement, not compete. That means big bold patterns and dark granite are being replaced by honed finishes and soft, muted shades; quartzite is becoming even more popular. Homeowners are looking for a natural, organic feeling rather than a commercial kitchen look.
Everything old is new again. Cottage style and Americana are resurfacing (did they really go away?) and home designs are moving away from ultra-sleek and simple to styles and accents that feels familiar, like bead-board and insets. Accent colors are returning, along with custom-designed range hoods and other unique elements. A companion trend is repurposing and reusing vintage furniture and accents, or vintage look-alikes that give the feeling of something that’s lived in and loved.
Organization and storage that offers more than a place to hide things is in demand. People want to be able to keep kitchens organized and conceal clutter while still being practical. In addition to walk-in pantries and features like coffee stations, people are looking for unique ways to get clutter off the counters while still being able to quickly and easily access appliances, mixers, toasters and cleaning supplies.
Martha Stewart says some trends will never go out of style. These include white kitchens with texture and warmth provided by accents like wood, brick and warm metals. A soft, muted color palette with decorative accents like fluting and beading will always be in style. Quartzite counters get another thumbs up for both looks and durability with less care than marble or granite. Decorative island lighting is a way to bring personality to neutral or classic white spaces, along with pops of color in accessories and furnishings.
2023 Remodeling Trends
According to Anji (Formerly Anji’s List) 2023 State of Home Spending Survey, homeowners are looking to boost their quality of life through home improvement projects.
This year will see a shift in focus to general household maintenance, with about 29% of homeowners surveyed saying they will focus on maintenance. Homeowners want to keep their houses in tip-top shape with projects such as repairs, lawn care, house cleaning, and other tasks. According to the report, homeowners spent an average of $2,500 in 2022 on home maintenance projects and plan to spend more this year.
Interior painting and bathroom remodels are close behind maintenance, with interior painting as the second-most popular home project planned for 2023. About 23% of homeowners plan to paint at least one space in their homes.
Bathroom remodels come in as the third-most-popular home improvement project for 2023, with 22% of homeowners planning a bathroom renovation, a job which typically involves a Pro.
About 20% of homeowners will upgrade their floors in 2023. Hardwood has become a more popular choice for the main floor, along with hardwood look-alikes.
Smart technology has gone mainstream with 17% of homeowners plan to install new smart devices in 2023. From robot vacuum cleaners to smartphone-controlled lights and appliances, consumers are embracing push-button control.
Exterior painting, landscaping, adding windows and new fencing round out Anji’s top ten.
The National Association of Realtors recently reported on 2023 remodeling trends, including composite decks, which have been growing in popularity since the cost of lumber tripled during the pandemic and made durable, low-care composites much more affordable. One of their Pro contributors reported they are seeing a big trend to creating a second, rentable space in the home, including separate quarters suitable for renting as an Air B & B and accessory dwelling units for extended family or rental.
Credit Card Debt Increases Slow
US consumers' outstanding credit grew by $11.56 billion at the end of 2022, according to recently released Federal Reserve data. It was the lowest monthly gain since January 2021 and well below economists' expectations of $25 billion. Revolving credit balances, which are mostly credit cards, grew by 7.3% in December, the lowest monthly increase since the summer of 2021.
For much of 2022, consumer debt levels grew at record rates as pandemic-induced pent-up demand ran up against a period of rampant inflation. As interest rates rose, people began to cut back on spending overall and particularly on discretionary spending on big-ticket goods.
The average credit card carries a record-high 19.95% interest if balances are not paid in full each month. Bankrate data shows that 46% of card holders are carrying a balance from month to month. That's up from 39% a year before.
More people are putting necessities on credit cards, essentially financing those expenses over time at very high interest rates, which ultimately eats into disposable discretionary income. High inflation and higher interest rates make balances harder to pay off.
Spending on services has been rising steadily since pandemic restrictions loosened. Analysts speculate that this is most likely due to pent-up demand for dining out, traveling and entertainment.
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