2022 is shaping up as a “transitional year” for the home services market, as the explosive growth resulting from a COVID-related shift in home-related consumer spending has begun to taper off, a new report from Angi finds.
The Denver-based Angi, which last week released its third annual The Economy of Everything Home Report, said that the total home services market grew in 2022 by $62 billion, reaching a new high of $657 billion, although the rate of annual growth slowed from 18 percent in 2021 to 10 percent this year.
“This return to market normalcy is expected, and ultimately is a good thing for both homeowners and home service providers, as more normalized supply and demand means that homeowners can more easily find more pros to take on their projects,” said Mischa Fisher, chief economist for Angi, a digital source for residential needs, including renovation services. According to Angi the total market home improvement, home maintenance and home emergency repair expenditures will reach a total of 665.6 million projects, while home equity gains coupled with rising interest rates will increase the competitive position of remodeling compared to homebuying, as the total cost of buying a new home has nearly doubled since 2020
“This is one of the most dynamic times in the history of the home service industry, and while 2022 is a transition year to a more normalized market, what counts as ‘normal’ remains unprecedented,” Fisher said.
“Right now, there are a lot of competing forces, but we think these forces will end up as tailwinds for home services,” Fisher added. “For example, rising interest rates hurt consumer spending and home sales, but higher interest rates also anchor people into their existing homes and disincentivize moving, which in turn boosts remodeling.”