How inflation is affecting your home buying experience

• The cost of home remodeling upgrades has increased due to inflation, resulting in a surge in demand for such services over the past two years.
• Household furnishings experienced a 1.6% increase in prices from December to January, and a 9.3% rise in prices from the previous year.
• Home improvement spending in 2021 jumped 28% from 2020.

The demand for home remodeling increased significantly in the past two years due to Americans spending more time at home and realizing the need for improvements.

The prices of many goods people desire for a home renovation have increased due to inflation.

Household furnishings prices increased by 1.6% month-to-month and 9.3% year-over-year, according to the latest consumer price index released by the U.S. Department of Labor on Thursday. The new data showed that inflation rose more than expected, and household furnishings prices climbed even faster than those of other goods.

• Floor coverings: 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
• The percentage increase in clocks, lamps, and decorator items from month to month is 2.7%, while the year-over-year increase is 6.3%.
• Furniture for the living room, kitchen, and dining room increased by 2.2% month-to-month and 19.9% year-over-year.
• Appliances: 1.5% month over month, 8.5% year over year

The price spikes hit as demand for home upgrades soars.

In 2021, home improvement spending increased by 28% compared to the previous year, as stated in a recent report from Angi, a home remodeling website. On average, homeowners spent $10,636 on 3.7 projects.

Since Angi started tracking spending seven years ago, the average spending has been the highest.

The pandemic has led to an increased focus on the home, resulting in rising home prices to record highs (nearly 20% year-over-year) and materials prices increasing by up to 400% compared to pre-pandemic levels. As a result, the major growth in total consumer spending on home improvement should not be surprising, according to Mischa Fisher, chief economist at Angi, in a report.

Home remodeling retailers such as , , and experienced a significant increase in stock prices last year. However, their shares have declined since then due to inflation and rising mortgage rates. It is common for individuals to purchase new home furnishings following a remodel.

According to a report from Harvard's Joint Center for Housing Studies, there will be a significant increase in home remodeling at the beginning of the year, followed by a peak, before slowing down to a more steady growth rate.

According to Abbe Will, the rising costs of labor and construction materials, difficulty retaining contractors, and climbing interest rates could discourage owners from undertaking new or larger remodeling projects, as stated by the associate project director of the Remodeling Futures Program at HJCH.

The furniture in the living room, kitchen, and dining room has increased in price by 19.9% annually.