Interest rates, housing, and HVAC: A look at Jobber’s home service report

To economic nerds’ delight, software company Jobber, which serves over 200,000 contractors, released its quarterly “Home Service Economic Report,” highlighting industry trends and insights.

The big picture: The home service industries, coming off pandemic highs, cooled in 2023, and continued doing so, per Jobber, through the first half of this year.

• Americans’ post-tax earnings growth has also slowed, dragging down consumer confidence — how consumers feel about the economy — and spending.

• However, experts note that with inflation slowing and potential interest rate cuts looming, spending could pick back up into 2025.

• “[Interest rate cuts should] have a particularly strong effect on housing and home services as… financed home improvement projects become more affordable,” the report says.

On housing: Despite the noise, home values keep appreciating — in the second quarter, the average U.S. home sales price was $412,300.

• Yes, but: New permits and housing starts have slowed over the past few months, “which will have an effect on homes available for purchase in the coming few quarters.”

• Because new home purchases are linked to home service spending, this presents some “headwinds,” according to Jobber, to keep an eye on going into next year.

On HVAC: Jobber’s “Contracting” segment, including HVAC, plumbing, and electrical contractors, so far this year showed mixed results in revenue growth and new work scheduled.

• “Contractors had a particularly strong February and April increasing revenues 5% and 11% in those months, respectively,” the report notes.

• “However, declines in other months resulted in this segment having flat growth through the first half of 2024.”

Looking ahead: It’s anyone’s guess what’ll happen with the economy, but interest rate cuts may come as soon as next month.

• The report sums consumers as “cautiously optimistic,” and notes that “long-term, aging homes, which require significant updates, will continue to drive demand for home services.”

• Full report