Home Service Industry Shows Positive Momentum as Interest Rate Cuts Boost Consumer Spending

Despite fluctuations in new work volume, consumer demand for home services held steady in the third quarter, with spending on services outpacing consumer goods, finds Jobber’s Home Service Economic Report: 2024 Q3, highlighting more than 250,000 residential cleaners, landscapers, HVAC technicians, electricians, plumbers, and more, who run their businesses using Jobber.

The U.S. Federal Reserve’s recent interest rate cuts are already showing early signs of impact on consumer spending, bringing cautious optimism for the home service industry. After a slower first half of 2024, Jobber’s data shows increased momentum through the end of Q3, signaling a gradual recovery fueled by improved financial flexibility for consumers. These findings are also supported by the Michigan Consumer Sentiment Index (MCSI), a monthly survey based on interviews that measure U.S. consumer attitudes toward personal finances, business conditions and economic activity.

“As we move through the second half of 2024, we’re seeing encouraging signs for the home service category—especially as financial conditions continue to improve and consumer confidence grows,” said Sam Pillar, Jobber CEO and co-founder. “At Jobber, we’re committed to helping small home service businesses capitalize on these opportunities, and the data we’re seeing suggests a path toward sustained growth in the months and years ahead.”

Cleaning services, including residential and commercial cleaning, have seen rising median prices but declining volumes in 2024. While new work scheduled fluctuated due to reduced consumer spending, service providers have maintained stable revenue growth by increasing prices and focusing on premium offerings.

Higher average invoice sizes helped stabilize revenue, balancing the variability in new work. As interest rate cuts improve disposable income and consumer sentiment, household spending power is expected to rise, potentially driving further growth in home service demand. Economists anticipate that the interest rate cuts will continue into 2025, providing greater affordability in areas like mortgage rates and financing for home improvements. This environment is expected to boost activity across both the housing and home service markets as consumers look to invest in essential home maintenance and renovation projects.

The housing market remains closely tied to demand for home services, and recent data indicates a promising future for this sector. While certain indicators, such as construction spending, new permits, and housing starts, have shown temporary stagnation, the cumulative effect of rate cuts is projected to revitalize the market by mid-2025. Rising home equity and expected increases in home improvements will drive demand for both discretionary and essential projects, pushing projected annual spending to $477 billion by third quarter of 2025, nearing previous peak levels.