A new report from Angi (formerly Angie’s List) found that the home service market remained strong even as growth slowed in 2022, following a huge expansion through the last year or so of red-hot home sales.
Angi’s broad-based measurement of the total addressable market (TAM) for various home service projects grew 10.9%, or $62 billion, to reach a total $657 billion. The rate of growth was down from 18% last year, but still outpaced total GDP growth, according to the report, as consumers continued to inject money into their homes.
“2022 is a transitional year for the home service market,” said Mischa Fisher, chief economist for Angi, in a statement. “The explosive growth rate we saw last year as massive portions of consumer spending shifted to the home during the global pandemic has begun to taper off.”
Both emergency and improvement projects grew in 2022, with a total of 665.6 million projects over the last year. A total of six million people work in the home services sector, for approximately 2.5 million businesses.
Fischer said she believes some factors that are currently dragging on home sales will in fact provide a medium-term boost to home services and home improvement, even after the real estate market reaches “normal” levels.
“Right now, there are a lot of competing forces, but we think these forces will end up as tailwinds for home services,” she explained. “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.”
The big picture
In terms of where and how much consumers are spending on their homes, the breakdown is as follows:
- Home Improvement: $475 billion and 152.5 million projects
- Home Maintenance: $105.9 billion and 419.7 million projects
- Home Emergency Repair: $76.4 billion and 93.5 million projects
Additionally, the report notes that the age of the country’s housing stock continues to rise—to an average of 47 years. At the same time, home equity gains are increasing “the competitive position of remodeling versus moving,” the report claims, potentially a long-term boost for the home services sector.
