2. Growing with the Economy
According to Fitch Ratings, home improvement spending is forecast to increase 4.5% during Growth in the housing market will have the greatest impact, although higher interest rates could negatively affect refinancing for some consumers.
The Joint Center for Housing Studies of Harvard University (JCHS) estimates a similar increase, of 4.4% during Q1 2016, compared to 3.4% for Q4 2015, and then increasing significantly to 6.8% for Q
According to the JCHS’s LIRA, or Leading Indicator of Remodeling Activity, for Q3 2015, total home improvement spending will be $146.9 billion during Q and $154.5 billion during Q

3. More Homes = More Home Improvements
Existing home sales is a particularly good indication of home improvement product sales. During Q3 2015, sales totaled 5.5 million units, a 3.3% increase compared to Q and an 8.0% increase compared to Q
Another significant trend is that as more Millennials enter the housing market, 34% prefer an existing home in which they can make major renovations to create a more unique home. Plus, “fixer-uppers” are more affordable.
With continued growth in the labor market and wages, specifically, the new-household formation forecast for 2016 is 1.25 million. This is expected to contribute to a 16% increase in housing starts during 2016.

4. Remodeling: Major Impact and Influence
According to the National Association of Remodeling Industry’s (NARI) Q Remodeling Business Pulse, 80% of surveyed remodelers expected their revenues to increase during 2016, and by an average of 13.1%.
“Postponed projects,” at 63%, was the primary reason remodelers cited for expected growth during “Economic growth” and “home prices improving” were second at 48%.
Of all the remodelers participating in an October 2015 survey, 43% said their 2016 revenues would be the same as It is likely labor shortages and remodelers working at capacity may be the reasons for this less-than-optimistic outlook.

5. The Stores with More
In the retail home improvement market, The Home Depot and Lowe’s are the major players. The Home Depot is #4 on the National Retail Federation’s 2015 Top 100 Retailers list and Lowe’s is #8. Ace Hardware is next on the list at #28.
According to data on MarketWatch, The Home Depot’s revenues increased 5.5% from fiscal year 2014, $78.81 billion, to fiscal year 2015, $83.18 billion. For Lowe’s, the increase was 5.2% from $53.42 billion to $56.22 billion.
With total sales at US home centers reaching $210.1 billion during 2015, The Home Depot and Lowe’s were responsible for 66.3%. Total home center sales are forecast to increase to $220.3 billion during 2016 and $244.1 billion by 2019.

6. Home Improvement Shoppers Insights
DIY home improvement consumers continue to be a majority of shoppers. According to Market Force Information, 66% of men and 59% of women buy home improvement products and do their projects themselves.
Baby Boomers account for almost 50% of all home improvement spending, at 47.8 percent. The youngest Baby Boomers, or those in their 50’s, are expected to spend approximately 30% more than all other consumers on home improvements.
Although Millennials are only responsible for 2.6% of all home improvement spending and are still cautious homebuyers, 45% were planning or doing a home improvement project, according to a recent Better Homes and Gardens survey.

7. Advertising Strategies
Since Baby Boomers spend the most on home improvements and are part of the largest demographic of TV viewers, television should be a major advertising medium for home improvement stores.
Suggest that local home improvement stores or regional chains use TV and social media to promote a quarterly special event featuring top local remodelers in various categories to host in-store workshops and be referred to homeowners, especially those 55+.
Suggest that retailers organize and use TV and social media to promote an annual, semi-annual or quarterly community home improvement project similar to Habitat for Humanity. Volunteer remodelers could lead a team of DIYers and help improve their skills.

8. Social Media Strategies
Considering the large percentage of home improvement DIY content on Pinterest, retailers should have a major presence there. Pins can present latest products and project ideas or a showcase of the recent projects of remodelers “partnering” with the retailer.
Videos are essential content for retailers’ social media pages. In lieu of expensive productions, local retailers can post videos of employees explaining the scope of products available in a specific department and interviews with shoppers about their DIY projects.
Millennials will eventually be the dominant home improvement consumers, which is why a smart local retailer should start planning today to become the major presence in the mobile channel and execute an aggressive mobile marketing program during the next 5 years.