Building mat. and garden equip. and supplies dealers
Total Sector Spending
Overall spending trends across an industry sector
What's the story behind the data?
Building materials is frozen by mortgage rates, not broken. Mortgage rates at 6.6-7% locked the housing market, killing home improvement spend across all income brackets and most generations. November started +7.8%, crashed to -6.8% in February, recovered briefly to +3.7% in April, then fell again (-4.9% June, -5.3% September). This isn’t seasonal—it’s a category waiting for housing to unfreeze.
Home Depot (50% share) and Lowe’s (34% share) control the mass market. Menards holds 6-7% with strong regional density in the Midwest. Sherwin Williams commands $110 AOV (35% premium over Home Depot’s $80), proving specialty positioning defends margin even in down markets. Harbor Freight ($55 AOV) and Ace Hardware ($38-40 AOV) serve different customer needs—value tools and hyperlocal convenience.
Millennials (-8.5%) should be first-time homebuyers driving renovation spend—instead they’re priced out. Boomers (-6.1%) have home equity but aren’t spending. Gen Z (+6.4%) shows growth on small DIY projects. The $50K-$75K bracket (-7%) typically drives volume; their pullback signals affordability pain. Even high earners ($100K-$150K at -4% to -6.5%) are delaying projects.
Existing home sales down 2.4% in early 2025 per Morgan Stanley. First-time buyers locked out. Renovation activity frozen until rates fall or housing inventory increases. Category recovery tied to macro conditions, not retail execution.
Implications by Audience
FP&A / Strategy Teams
- Defer major expansion until housing market signals improve — mortgage rates need to fall toward 6% before first-time buyers return and renovation spending resumes. Monitor Fed policy and housing starts closely.
- Millennials (-8.5%) won’t return until affordability improves — prime home-buying demographic (ages 28-43) is locked out by costs, not choice. When rates fall, this pent-up demand releases quickly—position for that inflection point.
- Specialty and regional strategies can outperform in down markets — Sherwin Williams’ $110 AOV proves premium positioning defends margin. Menards’ Midwest density shows regional focus works. Hyperlocal convenience (Ace) serves different needs than big box.
- Volatility reflects tariff timing, not demand destruction — April’s +3.7% followed February’s -6.8% as consumers front-ran policy changes. Inventory planning must account for policy-driven surges, not just seasonal patterns.
- High-income pullback is discretionary delay, not permanent — $100K-$150K down -4% to -6.5% means affluent homeowners are postponing projects, not canceling. When macro uncertainty clears, backlog releases.
- Pro contractor channel vs. DIY retail perform differently — track which customer segment drives your revenue. Pro spending may hold better than DIY if commercial construction remains steadier than residential.
Marketing and Brand Teams
- Premium positioning differentiates when price competition intensifies — Sherwin Williams’ pricing power proves quality commands premium even in down markets. If you’re commodity-positioned, you’re competing on price alone.
- Target Boomers and Gen X over Millennials right now — Boomers (-6.1%) have equity, Gen X (-0.3%) least negative. Millennials (-8.5%) are locked out. Shift budget to cohorts with current purchasing power.
- Project-based campaigns over brand awareness — when spending is episodic and lower frequency, focus on known renovation windows (spring, post-tax-refund). Broad awareness spend wastes budget in contracting category.
- Hyperlocal targeting outperforms national campaigns — Midwest housing more affordable than coasts. Regional market conditions vary wildly. Concentrate spend where housing markets hold.
- Bundle to drive basket size on infrequent trips — paint + supplies + tools in single promotions. Customers making fewer trips need everything at once. Cross-category bundling increases transaction value.
- Professional contractor programs defend share — pros shop more frequently and have predictable project cycles. Loyalty programs and trade pricing can insulate revenue from DIY volatility.
Investors
- Scale players with diversified revenue (HD, Lowe’s, Menards) weather downturns better — mass market position + pro contractor revenue + geographic diversification provide stability. Pure-play specialty faces higher volatility.
- Watch mortgage rates as leading indicator — if Fed cuts rates and mortgages fall below 6%, category recovers within 2-3 quarters. Housing starts and existing home sales signal inflection points.
- Millennial pent-up demand = recovery catalyst — -8.5% from ages 28-43 represents deferred projects, not canceled ones. When affordability improves, catch-up spending accelerates quickly.
- Specialty positioning (Sherwin) defends margin in downturns — $110 AOV vs. $80 Home Depot shows pricing power. Premium players maintain profitability; commodity players compress margins.
- Tariff policy clarity reduces volatility — February and June crashes followed policy uncertainty. Stable trade policy allows better inventory planning and reduces panic-buying cycles.
- Regional players with density advantages (Menards in Midwest) can outperform national averages — affordability varies by market. Strong local presence in stable housing markets outperforms broad geographic exposure.
Policy Makers
- Housing affordability directly impacts category health — mortgage rates at 6.6-7% locked Millennials out of homeownership, freezing renovation spend. Rate policy and down payment assistance could unlock demand.
- Millennial homeownership crisis = long-term economic drag — -8.5% spending from prime buyers means lost GDP growth, construction jobs, and retail activity. First-time buyer programs would accelerate recovery.
- Tariff uncertainty drives volatility — February and June crashes correlate with policy announcements. Predictable trade policy reduces panic buying and stabilizes business planning.
- Regional housing dynamics require localized solutions — Midwest more affordable; coasts locked out. Federal policy treats all markets equally, but local interventions (zoning reform, state tax incentives) could target high-cost areas.
Top Brands by Market Share
Leading brands ranked by market share within sector
Trends + Insights
Housing freeze = spending freeze Mortgage rates at 6.6-7% stopped home sales and renovation activity. Every income bracket except Gen Z negative. Category tied to housing market health—won’t recover until rates fall or inventory increases significantly.
Millennial lockout creates pent-up demand -8.5% from ages 28-43 represents deferred spending, not permanent loss. When affordability improves (lower rates, increased wages, down payment assistance), this cohort will drive recovery surge.
Premium positioning defends margin Sherwin Williams commands $110 AOV vs. Home Depot’s $80 (35% premium). Even in down markets, customers pay for quality in specialty categories. Commodity players compete on price; premium players compete on value.
Regional density matters more in downturns Menards’ 6-7% share concentrated in Midwest where housing is more affordable shows focused geographic strategy can outperform broad national presence when markets diverge.
Tariff timing creates predictable volatility February -6.8%, April +3.7%, June -4.9% pattern follows policy announcement cycles. Consumers front-run tariff deadlines, then pause. Smart retailers anticipate these swings for inventory planning.
Gen Z DIY reflects different customer need +6.4% growth on lower AOV ($38-55) represents apartment dwellers and small projects. Different customer profile than traditional homeowner renovation—requires different merchandising and marketing approach.
Pro contractor vs. DIY retail diverge Professional contractor spending more stable than DIY consumer. Businesses with strong pro programs (trade pricing, loyalty, delivery) can insulate revenue from consumer volatility.
Top Brands by AOV
Leading brands ranked by average order value within sector
This macro sector analysis provides detailed insights into economic trends and consumer behavior patterns. The visualizations below are derived from real-world transaction data and economic indicators.
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Sector Spending by Income Bracket
Industry sector spending patterns by household income level
Sector Spending by Generation
Industry sector spending patterns by generational cohort
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