Decline in home-related purchases signals eroding confidence

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Just how much has U.S. consumer spending for home-related purchases decreased over the past couple of years? According to Deloitte’s Global State of the Consumer Tracker, plans to buy home furnishings and other home-related purchases have eroded fairly steadily.

Looking at the oldest data available from Sept. 26, 2021, U.S. consumers planned to allocate 8% of their share of wallet over the next four weeks toward home-related purchases. Broken down by age group, it was 10% for those 18 to 34, 9% for those 35 to 54 and 4% for the 55 and older group.

A year later, however, on Sept. 26, 2022, the oldest group’s number declined to 3% of their share of wallet for home purchases over a four-week period. For the 35 to 54 group, it dropped two percentage points to 7%, while the Gen Z and Millennial group declined to 9%. Among all age groups combined, share of wallet for the category fell to 6%.

The most recent data available this year, from Aug. 28, shows an even sharper decline in planned spending for the home, dropping to 3% among the combined ages, about a 62% change over a two-year span. In almost a year’s time, the youngest group was down to allocating 4%, while planned spending within the 35 to 54 sector fell to 3%, and Boomers and older Gen Xers were only setting aside 2% of their wallet share for home purchases.

In contrast, while also seeing a decline between September 2021 and August 2023, clothing and personal care’s share of wallet dropped to 8% from 11%, a 27% decline. The pullback on recreation and leisure was also more gradual, dropping to 11% in 2023 from 13% in 2021, about a 15% fluctuation.

Where is the spending allocation going? Share of wallet committed for housing over the two-year period for all U.S. consumers tracked rose to 25% from 13%, a 92% increase. Groceries, meanwhile, rose much more modestly, from 12% in 2021 and ‘22 to 13% in 2023.

Deloitte’s Global State of the Consumer Tracker is an online panel survey fielded across 24 countries and targeting 1,000 adults 18 or older in each country.