Expect the DIY Spending Boom to Taper Off by the Middle of 2021, Harvard's JCHS Predicts
This year's Covid-induced boomlet in do-it-yourself spending ultimately will slow in 2021 because of two powerful forces, according to the latest forecasts by the Remodeling Futures Program at Harvard University's Joint Center for Housing Studies (JCHS).
As a result, JCHS' latest Leading Indicator of Remodeling Activity--aka LIRA--shows the annual growth rate in U.S. renovation and repair spending to rise to about 4.1% in the first quarter but then soften to a 1.7% four-quarter growth rate by the July-September period. Here's the outlook:
"The surge in DIY and small project activity is lifting the remodeling market, but it remains to be seen if the strong sales market this summer translates into larger improvements that would drive even stronger growth in the coming quarters," Chris Herbert, JCHS' managing director, said in an Oct. 15 news release.
Kermit Baker, director of the Remodeling Futures Project, noted in an Oct. 13 commentary that the DIY boomlet had two factors hurting it. The first is that the DIY share of total homeowner improvement spending has declined over the years. Here are the JCHS' estimates:
DIY work has become rarer in part because people would rather spend their time doing other things--things that they no longer were able to do during the pandemic, so working on the house became a logical alternative. Houses and home repairs also are more complicated than they once were, Baker noted, so that damps the desire to do DIY projects.
Then there's another factor: aging baby boomers. "In 1995, 26% of owner households nationally were age 65 or older," Baker wrote in the commentary, co-authored by research assistant Sophia Wedeen. "As the baby boom generation has aged, by 2019 over 32% of owners were 65 or older. Our research has determined that owners 65 or older spend, on average, only 12% of their home improvement dollars on DIY projects. Owners under age 35, by contrast, spend almost a third of their home improvement expenditures on these projects, while owners age 35 to 44 spend over 20%."