Grilling on a Budget: How High Mortgage Rates Are Impacting BBQ Grill Sales

The current housing market faces many challenges including high mortgage rates and limited inventory. These pressures ripple beyond home sales, significantly influencing consumer spending habits. Interestingly, one affected area is the market for high-end BBQ grills. Let’s explore how housing trends are reshaping grilling culture and what this means for both industries.

1. The Housing Market’s Challenges

The average 30-year mortgage rate surpassed 7% in 2023, the highest in decades, exacerbating affordability issues for prospective homeowners​. Combined with limited housing inventory, home sales remain slumped, leaving many families priced out of the market.  This financial strain curtails spending on premium lifestyle products like high-end BBQ grills.

2. BBQ Grill Sales: Reflecting Shifts in Consumer Priorities

Weber sales have been sluggish —net revenue declined from $283.1 million in late 2021 to $164.9 million in 2023.​ As consumers grapple with rising costs of living and steep housing expenses, discretionary purchases like grills are deprioritized. Instead, buyers opt for smaller, budget-friendly, or second-hand models.

Angry BBQ

3. The Emotional Link Between Homeownership and Grilling

Backyard grilling has traditionally symbolized homeownership and stability. However, fewer people are buying homes, and the rise of renting has shifted consumer preferences toward portable grills designed for apartment balconies or small patios. The connection between owning a backyard and investing in premium outdoor cooking equipment is being redefined.

4. Broader Market Trends

• Second-Hand Growth: As in housing, the second-hand market for BBQ grills is thriving, driven by cost-conscious consumers.

• Innovation in Compact Solutions: Companies like Weber are adapting, launching models like the Lumin electric grill, which caters to renters and those with limited outdoor space​.

• Innovation in Mortgage Lending:  Companies like Takara are empowering lenders to reduce borrowers’ principal balance when they pay off their mortgage – a big win for homeowners who’ve been reluctant to move or refi due to today’s higher mortgage rates and home prices.  The lenders win too with increased originations, non-interest income, and no write-down.

  
  

5. Implications for Businesses

Market leaders must rethink their strategies to align with these changing demographics. Opportunities include collaborating with innovators to pilot new methods of addressing customer challenges and market stagnation.  Efforts should emphasize value and adaptability to match evolving consumer needs.

Conclusion

High mortgage rates and housing affordability challenges have created ripple effects, reshaping consumer spending in unexpected ways. The BBQ grill industry, deeply tied to the outdoor lifestyle aspirations of homeowners, serves as an interesting lagging indicator of the housing and mortgage markets. While the dream of backyard barbecues may be evolving, savvy brands and consumers alike are finding ways to adapt and thrive in this new landscape.

The grill pictured belongs to Rick Lutz, our Head of Business Development.  He found this 27-year-old beauty on Facebook Marketplace for $50.  It had only been used twice.  Nice budget-friendly score!