How might the global economy impact the home and building category? To examine what the future holds for businesses, including those in the heat, energy, air and water industries — and how changes in the housing market might affect future demand — Wray Ward regularly analyses and reports on industry data.
US housing and remodelling/home improvement statistics
Recent highlights include:
- The likelihood that we are already in a recession, especially in the housing market.
- Market stabilisation in 2023 after years of uncertainty and ongoing shifts.
- Recovery and long-term growth in housing and remodelling.
The truth about negative growth rates
At first glance, the U.S. housing market induces concern, given the negative growth rates that have characterised 2023 to date. However, the drastic drops in housing starts and single-family home sales are distorted by the abnormally high, unsustainable market activity of 2021-2022. Consider also that, in addition to building material shortages, the significant amount of inflation in single-family building materials over the past few years (including a 35% increase from 2020-22).
In other words, today’s numbers reflect the stabilisation of total housing starts and single-family home sales in 2023, with a mild recovery and normalisation expected in 2024.
Meanwhile, the home improvement products market continues to grow, albeit at a slower rate than the rapid growth of 2020-21. Project intent has dropped across all home improvement project areas; however, experts predict that the industry will experience continued, long-term growth, though with less force and momentum than in previous years.
Implications for the heat, energy, air and water industries
When the housing market is strong, there tends to be more demand for home renovation, and remodelling products and services. This, in turn, can increase demand for HVAC systems, solar panels, energy-efficient windows and insulation, and water-saving technologies.
Conversely, when the housing market is weak, demand for these products and related services may decrease, potentially reducing work opportunities.
Ultimately, there is reason to believe that the U.S. housing and home improvement markets will experience a mild recovery and stabilisation in the coming years. Knowing the recession is expected to be mild, ask yourself: How are you maintaining momentum for your brand without taking unnecessary risks?
Wray Ward is a U.S.-based, full-service agency that creates inspired marketing solutions for brands in the home, building and destination categories.
