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From Home Furnishing Business
Is the Home Improvement Boom Over or Just on a Smaller Scale?
August 17,
2023 by HFBusiness Staff in Business Strategy, Industry 
According to an article on Axios, Economy & Business, America's home-improvement boom is over, but people aren't exactly abandoning projects around the house.
The pandemic fueled DIY projects at home as well as helping to increase spending at retailers like Home Depot and Lowe’s. As the pandemic has subsided, and travel and entertainment have become available again, consumers have shifted their spending away from home improvement to leisure activities.
Home Depot recently reported that its revenue fell 2% in the second quarter compared to the same period last year. This was, however, $700 million more than analysts were expecting, and Home Depot’s stock was slightly up later that afternoon.
Major renovation projects are giving way to smaller projects as folks are spending more time away from home. The number of transactions at Home Depot of more than $1,000 fell by 5.5%. The average customer spent $90.07 in a single trip in the last quarter, which was flat from a year earlier, but there were 1.8% fewer transactions overall.
"After three years of unprecedented demand in home improvement market, we continue to see softer engagement in big-ticket discretionary categories like patio and appliances that likely reflects both pull-forward of these single-item purchases and deferrals," Home Depot Executive VP of Merchandising William Bastek said on an earnings call.
Elevated mortgage rates continue to “exert a dampening effect on housing industry spending.” Sentiment among homebuilders fell in August for the first time in seven months, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
Also, spending at furniture and home furnishing stores fell by 1.8% from June to July according to the Census Bureau.
"Items with higher price tags, such as landscape gardening, appliances, barbecues, and patio furniture, face the most significant risk of a decline in sales," Shoggi Ezeizat, an analyst at research firm Third Bridge said, but "on the plus side, our experts believe that consumer pricing sensitivity is still less of a concern. There is also some optimism in the DIY segment as inflation begins to ease."