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Home Renovation Spending Plunges Amid Ongoing Supply Chain Challenges

Growing concerns around the Delta variant drives dip in travel and entertainment related expenses


September 22, 2021

  • Home improvement projects stall. Ongoing supply chain snags, limited inventory, and higher prices likely drove a 10.4% month-over-month decline in home improvement spending. From appliance shortages to shipping delays leaving shelves bare, August saw home improvement related expenses reach its lowest share of spend since January 2021, making up 4.3% of total credit card purchases.

  • Back-to-school boosts retail spending. With most schools going back to in-person learning, credit card spending on clothing in particular rose 7.6% month-over-month in August. Electronic-related purchases saw a slight increase of 1.5% month-over-month as well, which is likely related to students needing new laptops, tablets and other devices for school.

  • Travel plans are grounded and entertainment spending slows. After making monthly gains for seven straight months, credit card spending on travel-related expenses dipped down 12.0% month-over-month in August. Entertainment-related spending also saw a decline, falling 7.4% month-over-month, with many choosing to stay closer to home and pass on live gatherings and events amidst concerns about rising COVID-19 cases.

The Tally Credit Card Spending Index has been tracking the spending habits of Americans carrying credit card debt since January 2019. It ranks the share of dollars spent using credit cards each month at retailers and merchants in categories, including entertainment, groceries, personal care and fitness, shopping, restaurants and travel.

Home improvement projects dip in August

Many Americans jumped into do-it-yourself (DIY) and home improvement projects during the pandemic, pushing forward renovations either long forgotten or paused. This category includes credit card purchases at home improvement or furnishing retailers such Home Depot, Lowes or Crate&Barrel. It also includes transactions with contractors and landscapers.

Supply chain challenges, severe material shortages, and higher prices were likely drivers of a 10.4% month-over-month decrease in home improvement spending. In fact, home improvement related expenses reached its lowest share of spend since the start of 2021, making up 4.3% of total credit card purchases. At the height of the pandemic, spending in this category peaked at 6.4% in May 2020 and stayed well above 4% through most of 2020. By comparison, spending never exceeded 4% in 2019.

Lumber prices have finally fallen off record levels but continued supply chain challenges, limited materials, and high costs of labor associated with a shortage of workers may see this trend holding steady in the near term.

Retail spending is fashionable again

Fueled by back-to-school shopping and the possibility of returning to the office, credit card purchases on clothing jumped up 7.6% month-over-month in August. This is the first monthly gain since April 2021 when the COVID-19 vaccine became more broadly available. Making up 6.8% of all credit card purchases, this is a far cry from the typical spending seen prior to the pandemic where clothing-related expenses hovered between 8-11%.

This past spring, many Americans went shopping in anticipation of vacations and social gatherings, an emotional act of “revenge spending” to regain what was lost over the last year. Now spending in this category is likely correlated to need-based expenses. After a year of virtual classrooms, there was excitement and appetite to once again embark on back-to-school rituals like shopping for new wardrobe staples for the upcoming year. For others, spending was driven by the possibility of returning to the office and shedding their loungewear-inspired closet refreshes. Compared to last August, spending on clothing rose 12.8% year-over-year. 

As a category, retail made up 20.5% of credit card purchases in August, with a small 2.0% month-over-month gain from July. There was a slight increase in electronic-related purchases of 1.5% month-over-month. This subcategory of retail likely saw a small uptick in electronic spending due to students needing new devices such as laptops and tablets for school. While spending on specific goods like clothing and electronics saw a bump in August, all other retail purchases saw a 6.4% month-over-month decrease, possibly driven by limited inventory and higher costs due to inflation. As a result, retail spending is likely to decrease from here.

Travel spending dips amid Delta variant concerns

Growing concerns about rising COVID-19 cases and the Delta variant have quickly tempered spending on travel. After seven-straight months of month-over-month gains, credit card purchases on airlines, hotels and vacation vendors fell for the first time in August by 12.0% month-over-month. Travel made up 8.7% of total credit card purchases, which is the lowest share of spend since April when spending climbed to 8.1%. 

Commute-related spending also dropped during this time, falling 6.4% month-over-month in August. The combination of higher gas prices and the Delta variant likely signals a desire to stay at home or close by for any activities.

Entertainment spending takes a back seat

Spending on entertainment remained relatively flat in 2021 until June and July, which saw a notable spike in demand for concerts, sporting events, amusement parks, and movie theaters. This all came to a halt in August, when spending dropped down 7.4% month-over-month in August amidst rising COVID-19 cases.

Despite this dip, this is the third straight month that spending in this category has exceeded 5% since February 2020. Entertainment expenses in August made up 5.2% of all credit card spending. Throughout most of the pandemic, spending hovered between 3% and 4%. 

Now as schools are back in session and Delta variant concerns remain, spending on live entertainment and recreation may continue to taper off as Americans choose to stay closer to home or revert to tried and true activities like small outdoor gatherings. Whether this trend continues will largely depend on whether there’s an impact on marquee events like the MLB playoffs and the NFL season, and if more concerts and tours get postponed.


The Tally Credit Card Spending Index ranks the share of purchases made each month in several categories: entertainment, groceries, home improvement, personal care and fitness, pets, restaurants, shopping (includes electronics and clothing), travel, transportation and other. The “other” category includes unspecified transactions and categories that are too small to be ranked separately.

Each monthly index is based on a statistically significant sampling of approximately 200,000 anonymized credit card transactions in a given month made by Tally members, many of whom carry credit card debt. The index has been tracking credit card transactions since January 2019. All historical transaction data has been normalized to the most current month.

Share of the spend measures the proportion of total dollars spent in each category relative to total credit card expenses within a month. Percentage changes are calculated using the total dollar amount spent in each category on a month-over-month, quarter-over-quarter and year-over-year basis.