Americans Are Spending Less on Holiday Decor, Gifts as Economic Uncertainty Ramps Up

56% of people who report spending less on decorations this year say it’s because they’re saving money, while 44% cite economic uncertainty

SEATTLE--(BUSINESS WIRE)--Holiday cheer is colliding with financial fear, with 28% of Americans trimming their decorating budgets this year and 26% reining in gift spending, according to a new survey from Rocket Mortgage and Redfin, the real estate brokerage powered by Rocket. The pullback isn’t due to a lack of holiday spirit. It's a sign of the times, with many people choosing to spend cautiously amid economic uncertainty.

28% of Americans are spending less on decor this year, and 26% are reducing gift budgets

Nearly one-third (28%) of Americans are spending less money on holiday decorations this year than last year, while just 16% are spending more, according to a new Rocket Mortgage and Redfin survey conducted by Ipsos.

People are also cutting back on gift spending. Just over one-quarter (26%) of Americans are spending less on gifts than they did last year, while 18% are spending more.

Budgeting, economic woes are driving Americans to trim holiday budgets

More than half (56%) of those who are spending less on decorations this year say it’s because they’re trying to save money, while 44% cite economic uncertainty.

The next-most common reasons: 42% have enough decorations and don’t need more, 19% aren’t hosting holiday celebrations, and 17% are feeling less festive than last year.

“Even small cost-saving measures, like cutting back on buying new holiday decor, reflects a broader feeling of caution when it comes to the economy,” says Daryl Fairweather, Chief Economist at Redfin. “People are worried about earning less money while costs go up. Americans are keeping their wallets close not because they don’t want to celebrate, but because they’re being sensible. The fact that some people are cutting back during the holidays could be a sign that consumer spending will slow down in the new year.”

Some Americans are spending as much on decorations as housing

Among those who are spending money on holiday decorations or gifts this year, roughly one-quarter (24%) are shelling out the same amount as they are on their monthly mortgage or rent payment on decorations. Another 7% are spending more on decorations than their monthly housing payment.

And among those who are spending money on decorations or gifts, 22% are dropping just as much on gifts as their monthly housing payment, while another 12% are spending more on gifts.

Still, many of the people who are spending money on either decorations or gifts this year are spending less than their housing payments. Two in five (40%) are spending less on decor than housing, and 43% are spending less on gifts than housing.

Nearly 1 in 5 millennials (19%) are spending more on gifts than their rent or mortgage, as are 17% of people with children living under their roof.

Millennials are also the group most likely to spend more on decorations than their monthly housing payment, with 15% doing so.

“A lot of people want to make the holidays feel magical, even if it means stretching their budgets,” says Fairweather. “Millennials, who often have their children living at home, are especially likely to splurge around the holidays because they’re in the thick of creating traditions for their families. If they can afford to splurge and get back on track the next month, shelling out for holiday cheer can be a good use of money. It’s also important, though, to avoid a debt hangover in the new year, and be aware that long-term financial stress can outweigh short-term joy.”

It’s worth noting that some Americans are unable to afford holiday decorations because their money is going toward rent or mortgage payments. Fifteen percent of respondents say that after paying their housing costs, they don’t have money left over to buy decorations, while 34% have just a little money left.

Holiday cheer on the cheap: Many Americans are spending under $100 on decor, gifts

Most Americans are spending under $100 on decorations for this year’s holiday season. More than one-third (37%) are spending between $1 and $100, while another 36% are spending zero. Just over 1 in 5 people (22%) are spending more than $100, but less than $500.

"As people navigate inflation and an uncertain economy, they're taking a closer look at where every dollar goes," says Daniel McGrath, General Manager at Rocket Money. "Holiday decor often feels like an easy area to cut back, as many families likely already have what they need from past years. What we're hearing is a shift toward spending that feels more personal, including meaningful gifts, experiences with loved ones, and creating traditions that last beyond the season.”

The lion’s share (41%) of Americans are spending between $100 and $500 on holiday gifts this year, and 21% are spending between $500 and $1,000. Just under 1 in 5 people (18%) are spending between $1 and $100, while 10% are spending nothing on gifts.

Half of Americans decorate simply to celebrate the season – but some want to show off on social media, too

The most common reason Americans spend money on decorations is simply to celebrate and enjoy the holiday season, with 48% of respondents selecting that option. More than one-third (37%) cited making their home feel more festive for themselves, while 32% are spending money on decor to make their house feel like a home.

Nearly 1 in 5 people (17%) are shelling out for decorations because the price is right or they’re on sale, and 10% say they’re excited to decorate a home they just moved into.

Overall, roughly 1 in 10 people (9%) are decorating to share photos on social media. Millennials are more likely than other age groups to cite social media as motivation to shell out on decor, with 14% of them selecting that option. That’s compared to 10% of Gen Zers, 7% of Gen Xers, and no baby boomers.

Gen Zers, for their part, are far more likely than other age groups to buy decorations impulsively. Nearly one-third (31%) of Gen Zers spent money on decorations because they saw them at the store or online, and wanted to buy them in the moment. That’s compared to 10% of millennials, 9% of Gen Xers, and 5% of baby boomers.

“It’s no surprise that Gen Zers, who grew up with social media and one-click shopping, are most likely to make spontaneous purchases,” says McGrath. “Their feeds are full of seasonal decor trends and influencer recommendations, and because social media makes it so seamless to buy goods, it’s easy to turn inspiration into an impulse buy.”

Thanksgiving weekend is the most popular time to put up holiday decorations

The lion’s share (34%) of Americans put up their holiday decorations the weekend after Thanksgiving. The next-most common time of year is December 1-10 (17%). Roughly 1 in 7 people (15%) get a jump on the season, putting up decorations before Thanksgiving.

Once the winter holidays have passed, 34% of Americans take down their decor after the new year, from January 2-10, the most commonly cited time frame. The next-most common times to put away decorations are January 1 (14%) and after January 10 (14%).

To view the full report, including charts and methodology details, please visit: https://www.rocketmortgage.com/learn/americans-are-spending-less-on-holiday-decor-gifts

About Rocket Mortgage

Detroit-based Rocket Mortgage (NMLS #3030) is the nation’s largest mortgage lender and is a part of Rocket Companies (NYSE: RKT).

The lender enables the American Dream of homeownership and financial freedom through its obsession with an industry-leading, digital-driven client experience. In late 2015, it introduced the first fully digital, completely online mortgage experience. Since its founding in 1985, Rocket Mortgage has closed more than $1.9 trillion of mortgage volume across all 50 states.

J.D. Power has ranked Rocket Mortgage #1 in client satisfaction for both primary mortgage origination and servicing 23 times – the most of any mortgage lender. Rocket Companies, Rocket Mortgage’s parent company, has placed in the top third of Fortune’s list of the “100 Best Companies to Work For” the list for 22 consecutive years.

About Redfin

Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.

You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.