US Homeowners Take on Fewer Improvement Projects but Spend More in Q1

According to the Home Improvement Research Institute (HIRI), fewer US homeowners undertook home improvement projects in Q1, but those who did spent significantly more.

Overall homeowner participation in home improvement projects fell to 40.0% in Q1, down from 44.0% a year earlier. However, average spending per project increased 36.0% year-over-year to $5,368 from $3,957. HIRI said the trend reflects higher inflation and material costs, even as homeowners pull back from larger discretionary renovations. The share of homeowners choosing to repair rather than replace existing items or structures rose to 62.0% from 51.0% in Q4.

HIRI’s Q1 Contractor Business Sentiment Tracker showed the shift is affecting contractors. About 44.0% of contractors reported scheduled jobs were postponed in Q1, up from 27.0% a year earlier, while project cancellations more than doubled to 10.0% from 4.0%.

Contractors continued to identify financial constraints as a leading cause of project delays and cancellations. The share citing budget-related issues was 28.0% in Q1, compared with 30.0% a year earlier but up sharply from 15.0% in Q4. Meanwhile, 49.0% of contractors said inflation was a primary source of pressure on their business.

HIRI also reported that contractors are seeing a shift toward smaller, more budget-conscious projects. In Q1, 44.0% of projects cost less than $5,000, while only 8.0% exceeded $100,000, creating a more competitive bidding environment.