|
Forecast
Period
|
2024-2028
|
|
Market
Size (2022)
|
USD 448.08 Billion
|
|
CAGR
(2023-2028)
|
4.51%
|
|
Fastest
Growing Segment
|
Home
Decor
|
|
Largest
Market
|
South
|
Market
Overview
United States Home Improvement Market has valued at
USD 448.08 billion in 2022 and is anticipated to project robust growth in the
forecast period with a CAGR of 4.51% through 2028. The United States home
improvement industry is a vast and dynamic sector that encompasses a wide range
of products and services aimed at enhancing and renovating residential
properties. This industry plays a pivotal role in homeowners' pursuit of
comfortable, functional, and aesthetically pleasing living spaces. Home
improvement encompasses everything from minor repairs and maintenance to
large-scale remodeling projects.
One key driver of the U.S. home improvement market
is the country's robust housing stock, comprising millions of single-family
homes and multi-unit dwellings. Homeowners and landlords regularly invest in
renovations, upgrades, and maintenance to preserve and increase the value of
their properties.
The industry is supported by a diverse ecosystem of
retailers, suppliers, contractors, and service providers. Home improvement
stores like Home Depot and Lowe's are household names, offering a wide array of
products, from power tools and building materials to appliances and home décor.
Meanwhile, a vast network of contractors, plumbers, electricians, and interior
designers cater to the diverse needs of property owners.
Furthermore, the industry has witnessed notable
growth in the adoption of sustainable and energy-efficient home improvement
practices, reflecting a broader environmental and energy-conscious trend. As
homeowners continue to invest in their properties, the U.S. home improvement
industry is expected to remain a significant economic force, shaping the
nation's residential landscape for years to come.
Key
Market Drivers
Economic Factors and Housing Market Trends
Economic conditions and housing market trends have
a substantial impact on the home improvement industry. When the economy is
strong and consumer confidence is high, homeowners are more willing to invest
in home improvement projects. During economic downturns, however, people may
delay or scale back their renovation plans to save money.
Additionally, the state of the housing market is a
significant driver. During periods of robust housing activity and rising
property values, homeowners often engage in remodeling projects to increase the
value of their homes. Low-interest rates and favorable lending conditions can
also encourage homeowners to invest in home improvements by making financing
more accessible.
On the other hand, during a housing market
downturn, homeowners may be less inclined to invest in major renovations or
additions. They may prioritize essential repairs and maintenance over
discretionary projects, such as kitchen remodels or home additions. Therefore,
the cyclical nature of the housing market and economic conditions strongly
influence the pace and scale of home improvement projects.
In recent years, the U.S. housing market has
experienced fluctuations, with periods of high demand and rising property
values followed by corrections and cooling periods. These fluctuations have a
direct impact on the level of activity in the home improvement industry. As the
economy and housing market continue to evolve, home improvement businesses must
adapt their strategies to align with changing consumer behavior and market
conditions.
Aging Housing Stock and Deferred Maintenance
The aging housing stock in the United States is a
critical driver of the home improvement industry. Many homes across the country
were constructed several decades ago, and as they age, they require ongoing
maintenance, repairs, and upgrades. This need for maintenance and renovation
creates a steady stream of demand for home improvement products and services.
Homeowners often face the challenge of addressing
deferred maintenance issues, which can accumulate over time when routine upkeep
is postponed. These deferred maintenance needs can include roof repairs, HVAC
system upgrades, plumbing fixes, and structural improvements. Home improvement
companies can capitalize on this driver by offering services that address these
essential maintenance requirements.
Furthermore, as housing stock ages, homeowners may
seek to modernize their properties by updating outdated designs and systems.
This can involve renovating kitchens, bathrooms, and other living spaces to
improve functionality and aesthetics. The desire to bring older homes into the
21st century drives a significant portion of the home improvement market.
To tap into this driver, businesses can offer
renovation solutions that cater to the unique needs of older homes. Whether
it's preserving historical character or integrating energy-efficient
technologies, addressing the aging housing stock presents both challenges and
opportunities for industry.
Sustainability and Energy Efficiency
The growing emphasis on sustainability and energy
efficiency is another important driver of the U.S. home improvement industry.
Homeowners are increasingly interested in eco-friendly and energy-saving
solutions, not only to reduce their environmental footprint but also to lower
utility bills and enhance property value.
This driver is evident in the adoption of green
building practices and the installation of energy-efficient appliances,
insulation, windows, and HVAC systems. Solar panels and smart home
technologies, which help homeowners manage energy consumption, are also on the
rise.
Government incentives and regulations further boost
this driver. Federal and state incentives, tax credits, and rebates are often
available to encourage homeowners to invest in energy-efficient upgrades.
Building codes and standards also evolve to incorporate eco-friendly practices,
making it necessary for home improvement companies to stay current with these
regulations.
For home improvement businesses, embracing
sustainability and energy efficiency can be a competitive advantage. Offering
green building materials, providing expertise on energy-efficient solutions,
and helping homeowners access available incentives can set companies apart in a
market increasingly focused on environmental responsibility.
Technological Advancements and Digitalization
The home improvement industry has been
significantly influenced by technological advancements and digitalization.
These changes have impacted various aspects of the industry, from how consumers
research and plan projects to how companies operate and deliver their services.
Online Research and Inspiration: The internet has
become a primary source of information and inspiration for homeowners embarking
on home improvement projects. Platforms like Houzz, Pinterest, and Instagram
are popular for discovering design ideas, product recommendations, and project
inspiration. Businesses that maintain a strong online presence and engage with
customers through digital platforms can leverage this driver effectively.
E-Commerce: The rise of e-commerce has transformed
how home improvement products are bought and sold. Online marketplaces and
retailers offer a vast selection of items, from building materials to
appliances, delivered directly to the customer's doorstep. This shift in
shopping behavior has prompted brick-and-mortar stores to adapt and create
seamless omnichannel experiences.
Augmented Reality (AR) and Virtual Reality (VR): AR
and VR technologies are increasingly used for home improvement planning.
Consumers can visualize how various products and designs will look in their
homes, aiding in decision-making and reducing the risk of dissatisfaction with
the final result. Companies that integrate AR and VR tools into their services
enhance the customer experience.
Mobile Apps: Many home improvement companies have
developed mobile apps to streamline communication, project management, and
scheduling. Apps can also offer virtual consultations, enabling homeowners to
discuss projects with professionals without physical meetings.
Embracing technological advancements and
digitalization is essential for staying competitive and meeting customer
expectations in today's home improvement industry. Whether through
user-friendly websites, e-commerce capabilities, or innovative design tools,
companies that adapt to these digital trends are more likely to thrive.
In conclusion, the United States home improvement
industry is driven by a combination of economic factors, housing market trends,
the aging housing stock, sustainability and energy efficiency considerations,
and technological advancements. These drivers continually shape the landscape
of the industry, influencing consumer behavior, market conditions, and the
strategies of home improvement businesses. To succeed in this dynamic sector,
companies must remain attuned to these key drivers, adapt to changing circumstances,
and offer solutions that align with the evolving needs and preferences of
homeowners.
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Key
Market Challenges
Labor Shortages and Skilled Workforce
One of the most pressing challenges in the U.S.
home improvement industry is the shortage of skilled labor. Construction
workers, plumbers, electricians, and other tradespeople are in high demand, and
the industry struggles to attract and retain qualified professionals. This
issue is multifaceted:
Aging Workforce: Many skilled workers in the
construction and home improvement sector are approaching retirement age. With a
limited influx of younger talent, the industry faces a potential labor shortage
crisis.
Lack of Vocational Education: Over the years, there
has been a reduced emphasis on vocational education and apprenticeships,
leading to a dearth of individuals with the necessary skills to fill these
roles.
Seasonal and Unpredictable Demand: The industry
often experiences seasonal fluctuations in demand, making it challenging to
maintain a stable workforce throughout the year.
Competing Industries: The home improvement sector
competes with other industries, such as technology and healthcare, for the same
pool of skilled workers.
Addressing this challenge requires a multi-faceted
approach, including vocational training programs, apprenticeships, and efforts
to attract new talent to the industry. Businesses must also consider innovative
labor management strategies, such as utilizing technology and automation to
supplement the workforce during peak periods.
Supply Chain Disruptions and Material Costs
The U.S. home improvement industry is highly
susceptible to supply chain disruptions and fluctuations in material costs.
Recent events, such as the COVID-19 pandemic and natural disasters, have
highlighted the vulnerabilities in global supply chains. These disruptions can
result in delayed projects, increased costs, and potential profit margins.
Additionally, material costs can be volatile due to
factors like fluctuations in commodity prices, trade tariffs, and
transportation challenges. When material prices rise, it can lead to higher
project costs, making it more difficult for homeowners to afford renovations
and for businesses to maintain profitability.
The industry must develop strategies to mitigate
these risks, including diversifying suppliers, maintaining larger material
inventories, and seeking more sustainable sourcing practices. Accurate pricing
and estimating, as well as clear communication with customers, are also
critical to navigate these challenges effectively.
Regulatory Compliance and Environmental
Sustainability
The U.S. home improvement industry is subject to a
wide array of regulations at the federal, state, and local levels. Compliance
with building codes, zoning laws, environmental regulations, and safety
standards is essential to avoid legal issues and delays in projects. Navigating
this complex regulatory landscape can be a significant challenge for
businesses.
Moreover, there is a growing emphasis on
environmental sustainability, which has led to stricter energy efficiency
requirements and green building standards. Adhering to these sustainability
guidelines can be costly and time-consuming, and businesses that do not meet
these standards risk losing customers who prioritize eco-friendly practices.
Overcoming these challenges requires a deep
understanding of the regulatory environment, regular training of staff on
compliance matters, and staying informed about changes in building codes and
sustainability standards. Many businesses are also adopting green building
practices as a selling point to attract environmentally conscious customers.
Competition and Market Saturation
The U.S. home improvement industry is highly
competitive, with numerous players vying for market share. This saturation can
make it challenging for businesses to stand out and maintain profitability. Key
factors contributing to this challenge include:
Big-Box Retailers: Major home improvement retailers
like Home Depot and Lowe's dominate the market, making it difficult for
smaller, independent businesses to compete on price and selection.
Online Retailers: E-commerce platforms offer a vast
array of home improvement products, making it convenient for consumers to shop
online and bypass traditional brick-and-mortar stores.
Franchise Chains: National and regional franchise
chains, specializing in areas like kitchen remodeling or flooring, create stiff
competition for smaller, local businesses.
To address this challenge, many businesses focus on
niche markets and specialized services that cater to specific customer needs.
Building a strong reputation for quality work, exceptional customer service,
and local community engagement can also set businesses apart from larger
competitors. Additionally, collaborating with other local businesses or forming
alliances can help smaller enterprises pool resources and compete more
effectively in the market.
In conclusion, the U.S. home improvement industry
faces several formidable challenges, including labor shortages, supply chain
disruptions, regulatory compliance, and intense competition. These challenges
require businesses to be adaptable, innovative, and proactive in their
strategies. Navigating these hurdles effectively involves investing in
workforce development, implementing robust supply chain management, staying
informed about regulatory changes, and finding ways to differentiate from the
competition. By addressing these challenges, the U.S. home improvement industry
can continue to thrive and meet the evolving needs of homeowners.
Key
Market Trends
Sustainability and Eco-Friendly Practices
Sustainability has become a dominant trend in the
U.S. home improvement industry. Homeowners are increasingly concerned about
reducing their environmental footprint, conserving energy, and using
eco-friendly materials. This trend is driven by a growing awareness of climate
change and the desire to make homes more energy efficient.
Green building practices, such as using renewable
and recycled materials, implementing energy-efficient solutions, and reducing
water consumption, are gaining prominence. Home improvement projects often
incorporate features like solar panels, LED lighting, energy-efficient
appliances, smart thermostats, and low-flow fixtures.
Additionally, homeowners are seeking sustainable
landscaping options that reduce water usage and promote biodiversity.
Drought-tolerant plants, rainwater harvesting systems, and native landscaping
are becoming more popular.
As the demand for sustainability continues to rise,
businesses in the home improvement sector must adapt by offering eco-friendly
products and services. This includes providing options for green building
materials, energy-efficient upgrades, and expert guidance on sustainable
practices. It can also involve educating customers about available incentives
and tax credits for sustainable home improvements.
Smart Home Technology Integration
The integration of smart home technology is a trend
that's rapidly reshaping the U.S. home improvement industry. Smart devices and
systems are enhancing convenience, security, and energy efficiency in homes.
Homeowners are increasingly investing in smart thermostats, lighting controls,
security cameras, and voice-activated assistants like Amazon's Alexa or Google
Assistant.
These technologies offer homeowners the ability to
control and monitor various aspects of their homes remotely through smartphone
apps. Smart home integration is not limited to new construction but can be
retrofitted into existing homes. This trend also extends to the use of smart
appliances, such as refrigerators, ovens, and washing machines, which provide
increased functionality and energy efficiency.
For home improvement businesses, this trend
presents opportunities to offer installation services and expertise in
integrating smart home systems. Collaborating with technology providers and
staying informed about emerging innovations is essential to meet the demand for
this trend.
Aging-in-Place Renovations
The concept of "aging in place" is
another significant trend in the U.S. home improvement industry. As the
population ages, more homeowners are seeking to remain in their homes as they
grow older, rather than relocating to senior living facilities. This trend has
led to a growing demand for home renovations that enhance accessibility,
safety, and comfort for elderly residents.
Aging-in-place renovations can include the
installation of grab bars in bathrooms, wider doorways to accommodate
wheelchairs, non-slip flooring, and ramps for easy access. These modifications
allow older homeowners to live independently and comfortably in their homes for
longer periods.
To address this trend, home improvement businesses
are offering specialized services to assess homes and implement the necessary
modifications for aging in place. This often involves collaborating with
healthcare professionals to ensure that the renovations meet the specific needs
of elderly individuals.
DIY and Home Improvement Influencers
The do-it-yourself (DIY) trend has gained
considerable momentum in the United States. Many homeowners are taking on home
improvement projects themselves, drawn to the satisfaction of accomplishing
tasks and the cost savings associated with DIY work. This trend has been
further fueled by online resources, tutorials, and social media platforms,
which provide easy access to information and inspiration for DIY projects.
Home improvement influencers and content creators
on platforms like YouTube, Instagram, and TikTok have a significant impact on
this trend. They share step-by-step tutorials, design ideas, and product
recommendations, empowering homeowners to tackle various projects, from
painting and tiling to more complex tasks like kitchen remodeling.
For businesses in the home improvement industry,
embracing the DIY trend involves catering to DIY enthusiasts with quality
products, tools, and educational resources. It also means recognizing that
while many homeowners enjoy DIY projects, they may still seek professional
assistance for larger, more complex renovations. Offering a range of products
and services that cater to both DIYers and those in need of expert help can be
a successful strategy.
Segmental
Insights
Product Insights
Home decor has emerged as the fastest-growing
segment within the United States home improvement industry. This trend is
driven by shifting consumer preferences and lifestyle changes. As homeowners
seek to personalize and enhance their living spaces, they are increasingly
investing in interior design, furniture, wall art, lighting, and other decor
elements.
Several factors contribute to the rapid growth of
the home decor segment. First, the rise of online shopping and the availability
of e-commerce platforms have made it easier for consumers to discover and
purchase decor items. Second, the influence of social media, design-focused
television shows, and home decor influencers has sparked a greater interest in
interior design and inspired individuals to refresh their living spaces.
Additionally, as people spent more time at home during the COVID-19 pandemic,
the desire to create comfortable and aesthetically pleasing environments gained
even more significance, further boosting the home decor market.
Sales Channel Insights
Online sales have rapidly become the
fastest-growing segment within the United States home improvement industry.
This trend is propelled by the digital transformation and changing consumer
behavior. As more homeowners turn to the internet for convenience and a wide
range of product choices, the online market for home improvement goods has
witnessed remarkable growth.
Several factors contribute to this surge in online
sales. First, the convenience of shopping for home improvement products from
the comfort of one's home has greatly appealed to consumers, enabling them to
browse, compare prices, and make purchases at their own pace. Second, the
extensive product selections available on e-commerce platforms, coupled with
user reviews and recommendations, make it easier for customers to find the
right solutions for their projects. Third, online retailers often offer competitive
pricing and convenient delivery options.
Moreover, the COVID-19 pandemic accelerated the
shift towards online shopping as people aimed to minimize in-store visits. This
trend has continued to gain momentum, making the online segment the
fastest-growing category within the U.S. home improvement industry.
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Regional
Insights
The assertion that "South" is the
dominant region in the United States home improvement industry requires
clarification, as the home improvement sector's influence is not typically
attributed to a geographic region in the same way that specific states, cities,
or metropolitan areas may have dominance. The home improvement industry's
dynamics are driven by a myriad of factors including economic conditions,
housing market trends, and consumer preferences, which can vary significantly
across the United States. While the South may indeed have a strong presence in
the industry due to its population density, diverse housing stock, and regional
characteristics, it would be more accurate to analyze specific states or
metropolitan regions within the South that are prominent players in the home
improvement sector. These regions would have unique influences and dynamics
that contribute to their prominence in the industry.
Recent
Developments
- In September 2020, IKEA collaborate with Republic
of Gamers (ROG) to create a new line of affordable gaming furniture and
accessories to elevate the home gaming experience. The collection, which would
comprise of roughly 30 goods, was to be introduced first in China in February
2021, followed by the rest of the world in October 2021.
- In 2019, Ecosense, a fast-growing LED technology
business, announced the acquisition of Lumium Lighting. Lumium Lighting is a
privately held lighting firm situated in California that specialises in the
design and development of architectural linear lighting. Ecosense and Lumium
have similar beliefs about values, development, and innovation.
Key
Market Players
- The Home Depot U.S.A., Inc.
- Lowe’s Companies Inc.
- Menard Inc.
- ACE Hardware Corpoartion
- True Value Company
- 84 Lumber
- Floor & Decor Holdings Inc.
- 3M Company
- Kohler Company
- ABC Supply Co., Inc.
|
By Product
|
By Project
|
By Sales Channel
|
By Region
|
- Building & Remodeling
- Home Décor
- Outdoor Living
- Tools & Hardware
|
|
- Homeware Stores
- Franchised Stores
- Specialty Stores
- Online
- Others
|
- South
- West
- Mid-West
- North-East
|
Report Scope:
In this report, the United States Home Improvement market
has been segmented into the following categories, in addition to the industry
trends which have also been detailed below:
- United States Home Improvement Market, By Product:
o Building & Remodeling
o Home Décor
o Outdoor Living
o Tools & Hardware
- United States Home Improvement Market, By Project:
o DIFM
o DIY
- United States Home Improvement Market, By Sales Channel:
o Homeware Stores
o Franchised Stores
o Specialty Stores
o Online
o Others
- United States Home Improvement Market, By
Region:
o South
o West
o Mid-West
o North-East
Competitive Landscape
Company Profiles: Detailed analysis of the major companies presents in the United
States Home Improvement market.
Available Customizations:
United States Home Improvement Market report
with the given market data, Tech Sci Research offers customizations according
to a company's specific needs. The following customization options are
available for the report:
Company Information
- Detailed analysis and profiling of additional
market players (up to five).
United States Home Improvement Market is an
upcoming report to be released soon. If you wish an early delivery of this
report or want to confirm the date of release, please contact us at [email protected]