The home improvement industry has been enjoying steady growth for over a decade– one of the few industries to do so during the pandemic. But many experts worry that it will not last, saying the current state of the economy foreshadows a slump.
High inflation, a potential recession, pandemic-induced supply chain backlogs, and even geopolitical strife have taken center stage in the United States. There is a lot to be stressed about, and our survey of homeowners reflects that:
- 61% of homeowners surveyed say their level of stress about decisions relating to their home is “More than I can even handle” and “tough to manage.”
- 57% of homeowners believe their stress level today is worse than it was at the start of the COVID-19 pandemic.
When asked which factors contributed to the stress, 57% claimed it was because of pricing. Naturally, 68% also say that high cost is the biggest barrier to starting their home improvement project. An additional 12% blame their stress on the supply shortages.
What this means for contractors
The consequences of inflation and a potential recession depend on the category of projects. There are non-discretionary projects and discretionary projects.
Homeowners might want to start saving money, but it is often necessary if someone needs a non-discretionary project completed, such as a new roof. They cannot wait. Typically, exterior projects, like roofing, siding, and gutter, fall in this category.
For discretionary projects, such as kitchen or bathroom remodels, homeowners tend to be more hesitant when they feel uncertain. For example, our data shows that 47% of homeowners looking for windows will wait due to economic concerns.
It is not all bad news. There is still opportunity, and the data shows it. For example, despite 61% of people saying their stress is overwhelming, half of all homeowners surveyed are still pursuing home improvement projects in the next six months. And over 11% of them are looking to spend over $5,000.
But if past behavior indicates future behavior, there is good news– even for contractors who take on discretionary projects. After the Great Recession of 2008, the home improvement industry steadily increased every single year in the decade following. In fact, spending on exterior projects increased during the recession.
How to prepare
Yes, homeowners are worried about inflation and a potential recession, but business is still out there; your team just has to find it.
Get everything you can out of your leads. Once you get a lead, follow up immediately. A study showed following up in the first five minutes increases the chances of closing by x%. And do not give up on leads. Modernize has worked with contractors who have closed deals up to a year after the first touch.
Ensure your sales team is prepared for common objections and can ease homeowners’ stress. For example, in the case of price, explain the benefits of getting the project done, like how it could save money in the future. If they say they are just looking, offer a free estimate which can allow for budgeting and planning.
A homeowner’s home remains a top priority, even during economic uncertainty. Modernize is here to help with proven strategies for home improvement marketing and lead generation. Contact us to learn more about available services.