Hardware Retailing was in the crowd at the HIRI Summit in Chicago on September 20-21. Over the course of two days, attendees heard from over 12 speakers on diverse topics relevant to the home improvement industry. Review the 10 key areas that several speakers touched on here and learn more about how you can access the latest home improvement data from the Home Improvement Research Institute (HIRI) at hiri.org.
- Generation Z. While Gen Z is not at peak home improvement purchasing years yet, they will be before we know it. The NPD Group says this generation is currently spending money on storage products, and they support brands with strong personas that use messages that align with their key values. Alicia Rainwater from The Center for Generational Kinetics says teenager employment is low due to a lack of enthusiasm in getting drivers’ licenses. She also says the social issues they care most about are climate change and social justice. “The more we can learn about Gen Z now, the faster we will be able to adapt and be able to connect, understand and market to them when the time comes,” Rainwater says.
- Trades. There are big openings in construction and other trade jobs. The Great Recession saw skilled workers leaving these jobs and not returning. Add in the push for college education over trade education that has been prevalent for many years, and we are now facing an undersupply of skilled workers, says Danushka Nanayakkara-Skillington, who does forecasting and analysis for the National Association of Home Builders. Nanayakkara-Skillington says around 60,000 new hires need to join the trades every month to keep up with the growing industry and aging workforce.
- Recession. There are some differing opinions about the economy going into 2023. Nanayakkara-Skillington from NAHB predicts a mild or soft recession in 2023. Todd Tomalak from Zonda highlighted similarities between the current economic climate and the 1920s. The general outlook is that 2023 will see a struggling economy, but it will not be a carbon copy of any of the recessions the U.S. has seen in the past.
- Housing. Housing affordability will decline in 2022 and 2023, says Nanayakkara-Skillington. She says home ownership peaked in 2004 at 69.2% and is currently at 65.8% and will continue to decline as issues with interest rates and low inventory continue. NAHB’s Housing Opportunity Index (HOI) has reached the lowest level since the Great Recession at 43, meaning only 43% of new and existing homes are affordable to a typical family making the median household income of $90,000. Every quarter-point hike in the mortgage rate prices out 1.3 million households, says Nanayakkara-Skillington. Susan Yashinsky, vice president of innovation trends at Sphere Trending, mentioned solutions would be found in co-living and communal spaces.
- Millennials. Millennials are the largest living generation in the country right now and make up the largest percentage of homebuyers at around 46%, Nanayakkara-Skillington says. Rainwater says millennials and Gen Z are visual learners and buyers, meaning YouTube reviews of products and other video experiences are impactful. She also recommends giving ongoing quick-hit feedback to retain millennial and Gen Z employees.
- Remodeling. Carlos Martín, project director of the Remodeling Futures Program at the Harvard Joint Center for Housing Studies, predicts overall growth in the remodeling industry. Marine Sargsyan, staff economist at Houzz, says kitchen and bathroom remodels are the top projects homeowners are tackling. Planning and completion of projects is taking an average of nine months, and over three-quarters of homeowners are financing these projects with cash, with credit card financing being the second most popular option. With more people working from home and less need for cars, garage conversions are becoming popular, especially in walkable communities, Yashinsky says. Aging homes, a shortage of new homes, aging-in-place trends and recent homebuyers who may have settled with an imperfect house to succeed in a competitive real estate market will support growth in the remodeling industry, Tomalak says.
- Products. Sargsyan says homeowners value quality over price in the building materials category; price over everything for hand and power tools; and brands for appliances. Mischa Fisher, chief economist from Angi Inc., says as labor shortages continue, labor-saving products will become important. Many baby boomers want to age in place, so design and products that assist will be important moving forward, Yashinsky says.
- Trends. The development of skills in outdoor recreation, like foraging and gardening, are trending, says Yashinsky. Flexibility in home spaces is also trending, with spaces needing to serve multiple purposes, pocket doors have become in high demand, she says. The front yard lounge is becoming more popular, as people have fallen back in love with interacting with their community, are still spending more time at home and need more living space, and many have already expanded their living space into the backyard.
- Nature and sustainability. Climate change has brought interest in drought-tolerant landscaping, Yashinsky says. Resettlement communities, or communities built for those who will be displaced due to climate change, are being created, Yashinsky says. Eco-retrofitting and sustainable products will continue to become more important as governments start enacting plans to fight climate change and consumers like Gen Z gain more buying power and begin to think more about Earth’s future, she says.
- Technology. Solar energy is the least expensive source of electricity for most major countries for the first time in history, so innovation in building materials, like stained glass solar panels, is happening and will continue to occur, Yashinsky says. Invisible tech, which molds technology with design and masks interfaces so ambient computing looks like home design and is blended into materials like wood and cloth, will continue to develop and become more common, Yashinsky says.