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Millennials started to buy homes ‘in larger numbers’ amid pandemic: Angie’s List Co-Founder

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  • ANGI

ANGI Homeservices Chief Customer Officer Angie Hicks joins Yahoo Finance Live to discuss why millennials are spending more money on home improvements and weigh in on the latest home spending trends consumers are taking on during the pandemic.

Video Transcript

- --brought on by the pandemic. The latest numbers though out this week seem to point to potential slowdown coming. October pending home sales fell 1.1% month on month after a substantial run up there. That was off of a consensus estimate of 1.1% increase. Now those who have homes, though, as we've been talking about, have really been pouring money into upgrades. The home improvement boom continued to be fueled by Americans investing in a significant way into their homes. And the latest numbers out from Angie Home Services seem to continue to support that.

Angie Hicks is Angie Home Services' chief customer officer. She's also owner of Home Advisor. Angie, it's great to have you on today. I'm looking through the numbers here. An average project here, $13,138-- that is a $4,000 increase, roughly, from the year before. What are they spending the money on?

ANGIE HICKS: Sure. The state of home spending report just came out and we found that they're spending about $13,000 a year on their home improvements, up from 9,000 last year. And it's for a number of things. Top of the list is bath remodels. They are typically always high on the list. We also have interior painting and flooring to round out the top three.

- Angie, another interesting thing here from the report was an emphasis on millennial spending here. Out of age groups, spending the most on home improvement projects this year-- nearly $10,000. Talk to me about that because the expectation there would be A, obviously, as a millennial, I'll just share it, that millennials don't have homes, which is obviously false here. But the other one would be that, you know, they don't have enough money saved up to actually put money into home improvement projects. So is a lot of that just coming from the fact that we've seen homes get so expensive that maybe they're getting fixer upper-- fixer uppers here that would require some work and money to be invested?

ANGIE HICKS: We're certainly seeing millennials start to buy homes in larger numbers, you know, especially with the pandemic, where, you know, the thought of quarantining inside an apartment that does seem very appealing. So housing becomes more attractive to them. They're buying fixer uppers and they're putting their dollars to work there. They're taking dollars that they would have spent on entertainment or on travel and using that for their homes.

- Angie, when you talk about the average cost going up in terms of just how much Americans are investing into their homes, how much of that is just the sheer amount they're doing? And how much of that is the result of increase in supplies? Increase in cost in supplies.

ANGIE HICKS: Absolutely. We're certainly seeing a combination effect here. So we're certainly seeing people actually spending outright more dollars. We're seeing them invest in things like outdoor kitchens or kitchen remodeling, things like that. But they're also seeing higher labor costs in addition to supply costs. There have been issues of people being able to get the supplies they need to do some of these projects. So it's really a combination of those three, but underlying, there is definitely an increase in the actual consumer demand.

- Yeah, that was the interesting thing. When we think about home improvement projects, they don't come without risks. And certainly, as we're seeing cases spike here in the holiday season, you guys note that a few projects are cut short here due to concerns around COVID-19-- 30% not started or completed as a result of those fears. So talk to me about how important it is in terms of people's views out there to find professionals that might be stressing safety during all of this. I mean, is top of mind?

ANGIE HICKS: Absolutely. About 70% of consumers reported that companies that expressed what they're doing for safety when it comes to COVID-19 is decision making for them, is a part of their criteria. So it's super important. But it's been fascinating over the last eight months watching these small businesses really pivot and do what they need to to make sure that not only their employees, but their customers are safe.

Right out of the gate, about 90% of companies had put in protective measures for both employees and customers, whether that's extra PPE, extra cleaning. And I encourage these companies to always be forthcoming with what they're doing, because it's super important for consumers to understand how things are going to happen when someone's in their home.

- And you hope it's not just something they're saying and saying that their workers are COVID-free, but also, something they could show up and back up, as well. But Angie Hicks, Angie Home Services chief customer officer. Appreciate you taking the time to join us there. Be well.