29 Takeaways from HIRI's Insights Summit

By Craig Webb, President, Webb Analytics

The Home Improvement Research Institute’s (HIRI) annual Insights Summit is a numbers geek’s delight—and a must-attend for people who want insights into what’s happening with the economy and likely will happen over the next few years. Given our crazy times, the forecasts given Oct. 22-23 were fuzzier than usual, but they still represented far more expert outlooks than you can find at most events. Here are highlights.

What Bugs Remodelers Most

HIRI's 3Q survey lists the issues in the chart above as the top issues remodelers face when working with suppliers and retailers. Keep in mind these are views from remodelers, not builders, and include opinions from exterior specialists and landscapers. And the dealers they're talking about include The Home Depot, Lowe's, Harbor Freight Tools, Tractor Supply, and Menards, along with pro yards and hardware stores.

Forecasts, Forecasts, Forecasts—Nearly All of Them Slow

Speakers focused on different areas of the home improvement and housing economies, but just about all of them emphasized slow growth and a lot of uncertainty. Among the most important:

1. HIRI believes spending on building products in 2026 will rise 3.8% on a nominal live and 1.4% on an inflation-adjusted level. Not factoring in inflation, the growth rate for 2025-2029 will be only half what it was in 2019-2024.

2. The National Association of Home Builders (NAHB) believes remodeling spending will grow 4% in 2026 and 6% in 2027. As for home construction, it projects single-family starts will be virtually unchanged in 2026 from 2025 and might grow 3% in 2027. Multifamily starts will decline 4% in 2026 and another 1% in 2027, NAHB’s Danushka Nanayakkara-Skillington said.

3. Going into 2026, Zonda’s Todd Tomalak said, he had predicted home improvement spending would grow 7% in 2026 and show double-digit increases in 2027. He remains optimistic. “We think modest improvements in normalization [of the economy] will lead to a lot more dollars in what’s being improved,” Tomalak said.

4. S&P Global Market Intelligence’s Director of U.S. Economics, Michael Zdinak, thinks GDP growth for this year will be between 1.8% and 2.0% (a bit below NAHB’s forecast for 2025). The growth rates for inflation-adjusted household net worth and for spending are both slowing, he noted. The holiday season will give us good clues as to whether that trend will continue into next year.

5. For the economy as a whole, NAHB expects the gross domestic product will grow 2.6% in 2026 and 2.1% in 2027 after gaining only about 2.0% this year. All those numbers represent a slowdown from the average 3.4% GDP increase America experienced from 1958 to 2007.

6. Ken Simonson, Chief Economist for Associated General Contractors, says economic growth is close to stalling, with the number of canceled and deferred manufacturing projects likely to outnumber starts for new work. Both Simonson and Zdinak both said investment in non-residential construction is dwindling.

An April Surprise?

Most Americans appear to be unaware that the One Big Beautiful Bill Act enacted earlier this year will cut most Americans’ taxes for 2025, Zdinak said. As a result, it’s likely a huge number of people will get bigger-than-usual tax refunds next spring.

This “nice surprise,” as Zdinak put it, means lots of people will face a choice: How to use the windfall? Zdinak predicts higher-income Americans will spend the money, particularly on so-called durable goods, such as appliances and cars. He believes lower-income Americans probably will pay down debt. Recent reports note that credit-card, auto, and student loan bills all have been rising over the past year.

Higher Tariffs Won’t Go Away

Zdinak also predicted the average effective tariff rate will peak at 22% in the first quarter of 2026, then drift lower as deals are announced. Officially, tariffs on lots of goods are higher than 22% right now, but because of postponements and delayed implementations, the actual rate today is close to 15%.

The actual average tariff rate had been less than 5% before President Trump took office, but Zdinak doesn’t think they’ll get back to that level anytime soon. The next administration is likely to keep them, if only because they help pay for government spending, he said.

In the meantime, economists are trying to figure out how tariffs are affecting prices. Timely purchases before tariff announcements have helped temper the impact of tariffs, as has the creative use of foreign trade zone storage areas, plus some willingness to absorb costs to remain price-competitive at a time of slowing demand. Still, NAHB’s Nanayakkara-Skillington believes tariffs will keep fueling inflation because of how those tariffs gradually are taking effect.

New Life Stages, Ongoing Worries

Matt Carmichael of IPSOS surveys people worldwide every month, generating insights for his “What the Future” journal. He told HIRI attendees those surveys have revealed we are in the midst of developing two new stages of life:

• “Twenty-somethings.” This group is spending more time between graduation and marriage than their predecessors, so they have distinctive needs and wants.

• “Omnigenerians.” Americans are living a decade longer than their ancestors. In some ways, they are healthier at a later age. But once they get to advanced ages, their health-care needs become more serious.

Carmichael also noted that 68% of us believe in the American dream, which he basically summarized as a desire to have a better, richer life than the previous generation. But 80% of people today believe it’s harder to achieve this dream now. That may seem depressing, but Carmichael noted that John Mellencamp and Bruce Springsteen were singing about hard times in the early 1980s, and The Temptation listed numerous woes in their song “Ball of Confusion” in 1970.

“It has been hard to achieve the dream for quite some time,” Carmichael said.

What’s different now? Carmichael thinks it’s technology. While traditional rungs up the ladder, such as education and homeownership, are under attack, “the digital frontier is where there’s all the opportunity,” he said. People are pushing for individual freedoms, in part because they don’t believe in institutions. “They want to buy from brands that share their values,” Carmichael said. “But people are also overwhelmed by those choices.”

King's Favorites

Dave King, HIRI's Executive Director, listed these findings as his favorites from the numerous research projects HIRI has done over the past 12 months:

1. Consumers figure in about two-thirds of all building product purchasing, pros about one-third of pro. Between 2019 and 2024, pro spending grew faster than consumer spend. For 2025 through 2029, HIRI believes the situation will reverse, with consumer spending rising 4.3% and pro spending up only 3.6%.

2. In these inflationary times, don't confuse revenues with what HIRI calls "true growth." lawn and garden, soft-surface floor coverings, rools, and paint all are showing True Growth, HIRI believes. In contrast, the rising revenue numbers for dimensional lumber and gypsum are mainly from inflation.

3. Since 2000, we have the fewest first-time home buyers. This means that, for some products that don’t get bought until you buy a home, those products are going to suffer (e.g. outdoor power equipment).

4. What determines actual spend? Disposable income is a bigger predictor of how people will spend than is consumer sentiment. “The No. 1 predictor of building product spend is what happened the previous quarter," King said. "No. 2 is the change in disposable income over 4 or 5 quarters. No. 3 is the change in consumer sentiment from the previous quarter, as opposed to the actual number)."

5. “Uncertainty has a very short-term impact” on a decision to do a home improvement project.

6. Forty-nine percent of home improvement spending comes from people who make $149K or more. The $85K-148K income level accounts for 23% of spending. People under $85K figure in 28% of spending.

7. Income is the No. 1 predictor of how much money will be spent. This is true no matter what generation you’re in.

8. Going back to 2015, the top 20% of income earners in each two-year period consistently account for 49% of all home improvement spend. 

9. Pro contractors see tariffs, interest rates, and immigration as having a significant impact on business. Contractors who identify themselves as Democrats--a surprisingly high percentage, King remarked--are more likely to see significant impact.

10. Fundamentally, home owners care more about financial concerns than helping the environment.

11. Pros still prefer in-person resources when available. “That human touch still really matters.”

12. What matters most to pros on where they choose to shop. Top are wide variety of products, products in stock, competitive prices, convenience, easy checkout. A bit behind if a place that knows the customer’s needs and have product knowledge.

13. Product Quality, not price, is the bigger driver.

14. We have lots of room to grow in e-commerce. Biggest pain points include shipping costs.

15. Boomers prefer human interaction more than gen X and gen Z. Gen Z has far more concern about personalized recommendation. 

Farnsworth's Faves

Grant Farnsworth of The Farnsworth Group presented these insights regarding pro contractors:

1. Most home contractors polled by his group reported feeling optimistic, in part because they keep getting a steady supply of work. This is happening despite the fact that one in three jobs are getting delayed or canceled. Homeowner indecision is the leading factor that remodelers face when dealing with customers, followed by financial issues.

2. Labor is a problem now, but if Tomalak’s prediction of double-digit growth in a few years comes true, what will happen then? Farnsworth asked. "Just because it’s not No. 1 on the list doesn't mean you shouldn’t be on the lookout,” he said. What can manufacturers do about this? Make products easier to install, Farnsworth said.

3. Artificial Intelligence is growing dramatically as a source of product information. And AI is getting a hefty amount of its content from Reddit, he said.

4. Bigger customers are more likely to search more for suppliers. That's in part because they have deadlines to meet so they need products.