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Homeowners are ‘still going to spend’ on maintenance, expert says

Angi Chief Customer Officer Angie Hicks joins Yahoo Finance Live to discuss survey findings on home improvement spending amid a mixed economic backdrop.

Video transcript

[AUDIO LOGO]

BRIAN SOZZI: OK Home Service Directory provider Angie is out with its latest report on home spending. Finds that spending patterns are normalizing, as homeowners look to get more employment out of their homes.

Angie Chief Customer Officer Angie Hicks joins us now. Angie, nice to see you here this morning. We've been talking all morning long about some commentary made by Restoration Hardware's CEO that the housing market in this country is collapsing. From the standpoint of your survey, are you seeing any collapse in how people are investing in their homes?

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ANGIE HICKS: We are not seeing a collapse. And it's important to distinguish between the housing market and caring for our homes. You know, whether-- even in a downturn in the economy, we're still gonna see people spending. For most, their home is their largest investment and they want to take care of it.

They're just gonna choose to do different types of tasks. They might choose to do more maintenance and preventative tasks versus remodeling the kitchen or a bathroom, for example. But they're still going to spend. And that's what we're seeing.

In the most recent report, while it's down slightly from 2021-- excuse me, yeah, 2021, we're still up considerably in spend over prepandemic times. People are still investing in their home and making sure that they're taking care of it.

JULIE HYMAN: Hey, Angie, it's Julie here. Yeah, it's interesting, I'm looking at this and indeed we saw a decrease of 16% across home improvement maintenance and emergency repairs, a range of 16% to 18% from 2021. But as you say, an increase over the past several years.

I was interested in the survey-- and maybe this is just into the weeds too much, but I was curious. The difference-- how you categorize is the difference between improvement and maintenance, in particular, because I think like bathroom renovations you've categorized as maintenance. Like how do you decide what goes in which category?

ANGIE HICKS: Yeah, actually, a bathroom remodel would be an improvement.

JULIE HYMAN: Oh, OK.

ANGIE HICKS: So if you're adding a new deck at your house or doing some landscaping, remodeling your kitchen, those are improvement type things. If you think about maintenance, it's having your furnace tuned up, getting your gutters cleaned, doing plumbing, things like that are basic and are things that you need to do in good times and bad.

BRIAN SOZZI: Angie, take us into next year a little bit because we're likely to get more rate increases from the Federal Reserve. That might put more pressure on home spending. How do you think that will change how people invest in their homes?

ANGIE HICKS: Well, I think it's interesting. In this most recent survey, we did ask people about interest rates and inflation. And we're not surprised that 75% of them said that it is impacting how they're spending their dollars and how they're thinking about home spending.

But it's important to note, that if they can't move, there life doesn't change, right? So if their family is expanding or, you know, they need to finish a basement or they need some extra space, they still need to do it. And if moving is off the table, then they're gonna do it within the home they have. So we will see people continue to invest to make sure that their house fits their current needs.

JULIE HYMAN: What's a thing that people are most willing to spend on right now? And how has that been changing?

ANGIE HICKS: Absolutely. So right now what we've seen most recently, people are spending on maintenance, which is a great sign because they are actually taking care of the little things to prevent bigger surprises down the road. We've seen interior painting, as well as bathroom remodeling on the top of the list.

During the height of the pandemic, we were seeing lots of bigger spends like swimming pools, landscaping. Bigger projects that were more discretionary, quite honestly, because they had dollars that they were taking from travel and from other areas, and putting it into their home.

BRIAN SOZZI: Angie, is there still-- or has there been any material improvement in contractors, the people, the human beings just do some of these projects? Because as we know, during the pandemic, it was hard to get projects like this done because we couldn't find the people. And in many respects, that has continued to be called out by the major home improvement chains.

ANGIE HICKS: That-- I mean that is true. I mean, universally, there is a shortage in the labor supply in home services. So if people are looking for a good business to get into, going into home improvement is a great opportunity.

But what we are seeing and in this most recent survey is people said that more often than not, their budget-- their projects were getting done on time and in budget, which are both signs that we are doing a better job of managing expectations, the pros are doing a better job of managing expectations, and being able to deliver when they say they are.

So a lot of that-- a lot of that supply chain issue and some of those things that they really were experiencing during the pandemic, they're learning to work with. And they're being able to help guide their consumers through that process now.

BRIAN SOZZI: All right, we'll leave it there. Angie founder and Chief Customer Officer Angie Hicks, good to see you. Have a happy holiday season.