Inflation drives up prices for home furnishings and renovations
Lorena Fortuna, right, and her husband Anderson, holding their daughter Valentina, look at outdoor furniture at Jordan’s Furniture store in Reading, Mass., Friday, June 7, 2019.
Gregory Rec | Portland Press Herald | Getty Images
Home improvement demand has increased dramatically over the past couple of years as Americans hunkered down in their homes and saw everything in need of an upgrade.
Today, inflation has pushed up the prices of many things people are looking for when renovating their homes.
Prices for all household furniture rose 1.6% in January month-on-month and 9.3% year-on-year, according to the latest consumer price index release. Thursday by the US Department of Labor. The new data showed that inflation rose more than expected and prices for furniture rose even faster than those of other goods:
- Flooring: 0.8% month-over-month, 7.2% year-over-year
- Window coverings: 1.8% month-over-month, 16.2% year-over-year
- Furniture/Bedding: 2.4% month-over-month, 17% year-over-year
- Bedroom furniture: 1.8% month-over-month, 13.7% year-over-year
- Clocks, lamps and decorative items: 2.7% month-over-month, 6.3% year-over-year
- Living room/kitchen/dining room furniture: 2.2% month-over-month, 20% year-over-year
- Appliances: 1.5% month-over-month, 8.5% year-over-year
Price spikes have hit as home improvement demand explodes.
Home improvement spending in 2021 jumped 28% from 2020, according to a recent report by Angi, a home improvement website. The average homeowner spent $10,636 on an average of 3.7 projects.
Average spending is the highest since Angi started tracking them seven years ago.
“With increased focus on the home due to the pandemic, house prices reaching their highest level on record (nearly 20% year-over-year) and material prices in some cases 400% above or above their pre-pandemic levels, strong growth in total consumer spending on home improvement should come as no surprise,” Mischa Fisher, chief economist for Angi, wrote in the report.
Shares of home improvement retailers like Lowe’s, Home Depot, Masco and Sherwin Williams all rose sharply last year. But they have so far exceeded their highs this year, with inflation and rising mortgage rates undermining home renovations. People tend to upgrade home furniture after remodeling it.
A recent report of the Harvard Joint Center for Housing predicted big jumps in home renovation early this year, followed by a spike, then a deceleration to a more sustainable rate of growth.
“Rising labor and building material costs, difficulty retaining contractors and rising interest rates could discourage homeowners from taking on new or larger renovation projects,” he said. said Abbe Will, associate project director of the Remodeling Futures Program at HJCH.