Holiday Spending Trends Reveal Caution Amid Economic Uncertainty

The survey indicates that nearly one-third (28%) of respondents are spending less on holiday decorations compared to last year, while merely 16% plan to spend more. Similarly, over one-quarter (26%) of Americans are tightening their gift budgets, with only 18% indicating they will spend more.

Key Drivers of Budget Cuts

The primary reasons for this decrease in holiday spending are financial in nature. More than half (56%) of those who are scaling back on decorations attribute their decision to a desire to save money, while 44% point to economic uncertainty. Other factors include having sufficient decorations from previous years (42%), not hosting celebrations (19%), and feeling less festive than in previous years (17%).

Daryl Fairweather, Chief Economist at Redfin, remarked, “Even small cost-saving measures, like cutting back on buying new holiday decor, reflect a broader feeling of caution when it comes to the economy.” This sentiment underscores a growing concern among consumers about income stability amidst rising costs.

Interestingly, a notable 24% of Americans who are spending on decorations are allocating amounts comparable to their monthly mortgage or rent payments. Additionally, 7% spend even more than their housing costs on decorations.

When it comes to gifts, 22% report spending as much as their housing payment, with another 12% going beyond that amount. Despite these figures, many respondents are still spending less on both decorations and gifts compared to their housing expenses, with 40% and 43% respectively indicating they are spending less than what they pay for housing.

Millennials and families with children appear to be the groups most willing to splurge, with 19% of millennials and 17% of parents spending more on gifts than their rent or mortgage.

The survey also found that most Americans are prioritizing budget-friendly options for holiday decor. A significant 37% plan to spend between $1 and $100 on decorations, while 36% will spend nothing at all. Only about 22% are expected to spend between $100 and $500.

Daniel McGrath, General Manager at Rocket Money, noted, “As people navigate inflation and an uncertain economy, they're taking a closer look at where every dollar goes.” Many families are likely to rely on decorations from previous years, favoring more meaningful gifts and experiences over material spending.

Despite the budget cuts, almost half of respondents (48%) still feel compelled to decorate simply to celebrate the season. Other motivations include creating a festive atmosphere (37%) and making their house feel like a home (32%). Interestingly, a small percentage (9%) of Americans are decorating with the intent to share their festive spirit on social media, with millennials leading this trend.

The survey revealed that 34% of Americans put up holiday decorations during the Thanksgiving weekend, while 17% wait until December 1-10. About 15% start decorating before Thanksgiving, showcasing a variety of traditions across households.

As the 2025 holiday season approaches, the findings from Rocket Mortgage and Redfin indicate a cautious approach among consumers. With a significant number of Americans trimming their budgets for decorations and gifts, it appears that economic uncertainty is overshadowing the usual festive spirit. As people strive to manage their finances effectively, this trend could influence consumer spending patterns well into the new year.

The survey serves as a critical reminder of the delicate balance between holiday cheer and financial prudence, urging consumers to reflect on their spending habits in the face of ongoing economic challenges.