Forecast for Home Improvements Taken Down for the Year

The Home Improvement Research Institute said “prevailing macroeconomic challenges” were causing a slowdown in the market.

HIRI—the Home Improvement Research Institute—reported that the total home improvement market is now projected to grow by 3.4 percent in 2025, a reduction from the previous 5 percent growth rate projected in March. However the organization said it saw a split between the professional and consumer sectors of the marketplace with the former outperforming the latter.

It said consumer market sales growth is expected to advance by 2.6 percent this year, down from its 4.9 percent forecast in March. But professional market sales are now forecast to grow at 4.9 percent this year, consistent with the group’s March forecast.

“While our latest forecast reflects some near-term adjustments due to economic headwinds, the long-term picture for the home improvement market remains one of significant opportunity,” Dave King, HIRI executive director said.  “Looking out over the next five years through 2029, we anticipate a net gain in total market spend of roughly $300 billion in additional spend. While this growth is expected to be stronger toward the latter half of the period, it reflects that the underlying appetite and demand for home improvement projects are still robust.”

HIRI identified four areas that are currently impacting home improvement spending, led by rising costs and tariffs, particularly in lumber and copper. Duty rates from China, Canada and Mexico were the prime drivers of the increased costs.

It also cited a housing market where current homeowners were hesitant to move because their current mortgage rates were going to be lower than they would likely get in a new property. It called this the “locked-in effect.” HIRI also pointed to slowing consumer sending impacted by a likely upturn in inflation and a “cooling” labor market. The group also noted a 35 percent chance of a “pessimistic scenario” with the potential for a two-quarter recession beginning in mid-2025, impacted by the overall state of the economy.

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