Tax season is upon us, which means that Americans across the country are getting ready to use those highly anticipated tax refunds for something special in their lives. Recent CivicScience data shows that Americans are less likely to spend their refund on home improvements this year than last.
Some of the hesitation–but certainly not all–around investing those tax return dollars into home improvements may be due to the fact that overall purchase confidence is seeing historic lows: 65% of U.S. adults think it’s a bad time to do that kind of major purchasing.
Despite the less-than-optimistic views, intent to do home renovations in the next six months is holding strong. Nearly half of homeowners (47%) are going to do some sort of home improvement project in the next six months. Intent to improve or renovate is actually five percentage points higher than it was this time last year.
Of course, those with home renovation plans do have a rosier view about making major purchases right now, but 42% still think it’s a bad time… they’re just not letting it stop them. This just goes to show that sentiment doesn’t always impact behavior.
So who is planning home renovations and what can we expect, based on their intentions?
Currently, remote workers and, somewhat surprisingly, unemployed Americans–all of whom are spending a lot of time at home–are the most likely to be doing home improvement projects this year.
Home improvers will be spending more on average this year. Those spending under $5k have decreased four percentage points since this time last year, while those spending under $30k have increased three points.
A willingness to spend more money may be correlated with a similar increase in plans to hire a professional. In 2021, 37% of U.S. adults intended to do all of their home renovations on their own. Now in 2022, just 34% say the same.
Of course, major brands in the home improvement world will be happy to see that those who plan to do home renovations this year are more likely to prioritize brand over price. Additionally, those who are planning home improvement projects are also less price sensitive in general as of late.
Home Improvement Retailers
As for Americans’ favorite home improvement chain, The Home Depot takes first place, with 39% preferring the chain. Lowe’s comes in second at 36%. Given the data, it likely comes as no surprise that both home improvement giants rank highly among those planning to do renovations this year, with The Home Depot again having a slight lead.
So although general sentiment about major purchases is low this is not stopping a strong contingent of home renovators ready to spend to spruce up their spaces. Those most likely to do so are already spending a lot of time at home, and are ready to invest in higher ticket renovations–professionals included–to make their houses really feel like home.