"RVs do extraordinarily well in predicting business cycles because they’re such a big, volatile consumption piece for most American consumers," says economist Michael Hicks. Frederic J. Brown/AFP via Getty Images
Tesla is expected to signal a slowdown in sales tomorrow when it announces first quarter delivery figures. The electric vehicle maker is facing stiff competition from Chinese manufacturers, not to mention EV sales have hit some bumps across the board. But another segment of the vehicle market has been hurting even more: RVs. Motorhomes and towable trailers had their worst year in more than a decade in 2023.
Now there are signs that slump could be reversing, which could be a positive indicator for the economy as a whole.
A lot of economists like to watch things like bond rates or household consumption trends, but Michael Hicks at Ball State University looks to the campground.
“RVs do extraordinarily well in predicting business cycles because they’re such a big, volatile consumption piece for most American consumers,” he said.
They often cost hundreds of thousands of dollars, so sales tend to drop at the slightest hint of bad economic news and pick up again when consumers are feeling better.
But as with so many aspects of the economy, things got weird in the pandemic, said James Ashurst at the RV Industry Association.
“I think a winding road is a great sort of way to depict how the industry has been,” he said.
Ashurst said RV sales took off as Americans looked outdoors for social-distance-safe activities, then decelerated down almost 50% from their 2021 peak.
Higher interest rates have also cut into demand. “Most of the products that we sell are financed,” Ashurst said.
But with the Fed signaling rate cuts later this year, RV buyers who’ve been biding their time might make a move, said analyst David Whiston at Morningstar.
“I’m not worried about a permanent reset below pre-COVID levels, for example,” he said.
Manufacturers Winnebago and Thor both recently forecast a rosier end of the year, and overall RV shipments are already up 15% over last year. So the “RV Index” is looking good.
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FAQs
“RVs do extraordinarily well in predicting business cycles because they're such a big, volatile consumption piece for most American consumers,” he said. They often cost hundreds of thousands of dollars, so sales tend to drop at the slightest hint of bad economic news and pick up again when consumers are feeling better.
What is the economic impact of the RV industry? ›
The study revealed that the RV industry has an overall annual economic impact to the US economy of $140 billion, supporting nearly 680,000 jobs, and paying more than $48 billion in wages.
Are RV prices dropping in 2024? ›
Over the past few years, used motorized RVs have seen a consistent decrease in their market value, and this downward trend is still ongoing. In 2024, as newer models become more affordable and offer updated features, the appeal of older, used motorized RVs continues to decline, further driving down their prices.
Is the RV industry still booming? ›
Annual shipments of recreational vehicles, considered a proxy for sales, hit an all-time high in 2021, after demand soared during the pandemic. They dropped in 2023 but are projected to rebound this year.
Are new RV prices negotiable? ›
Remember: Every RV's price is negotiable! Don't let emotions get in the way. It's easy to get wrapped in the emotions of the deal-making process, but that still doesn't mean you're under any obligations at any point.
Is an RV a wise investment? ›
However, almost all personal vehicles depreciate over time, and that doesn't stop millions of Americans from heading to a dealership and purchasing a new car. In fact, a study done by Camper Report found that RVs lose 21% of their value as soon as they're purchased and over 35% after five years.
Why are so many people moving into RVs? ›
The Covid-19 pandemic forced more people into poverty. Some of the RV dwellers have jobs but either don't want to pay apartment rent, or can't afford to pay it, in a city where the average one-bedroom apartment costs around $2,500 a month.
What time of year is cheapest to buy an RV? ›
What's the best month to buy a used motorhome or travel trailer? On average, motorhomes and travel trailers are at their cheapest at the end of the year. You can also benefit from good deals in the neighboring months of November and February — after the high season ends and before the next spring season starts up.
Has the RV market crashed? ›
But another segment of the vehicle market has been hurting even more: RVs. Motorhomes and towable trailers had their worst year in more than a decade in 2023.
Is there still an RV shortage? ›
More RVs would be sold in 2021 than any other year, by a lot, but for the first time since probably the 2008 and 2009 crash, far more RVs were produced than sold. About 33,000 more. That was necessary to get some RVs back on dealer lots. After all, 2020 had a deficit of around 93,000 RVs.
Around a million Americans live full-time in RVs. Florida is one of the most popular places for full-time RVers to reside as it has no state income tax.
Are RVs losing value? ›
Brand-new RVs start losing value as soon as they're driven off the lot and continue to lose value throughout the first year rapidly. The RV depreciation rate increases at a steady rate after that until your RV hits double digits in age. Once an RV is ten years old or older, its value drops more rapidly.
Is now a good time to buy an RV? ›
He said it's currently a great time to buy an RV as camping manufacturer costs have gone down 10% for the consumer and the dealer, and dealers are no longer dealing with the inventory issues they saw during the pandemic.
How much under MSRP should I pay for an RV? ›
Most but not all RV's are marked up about 40 percent. Anything you can negotiate of around 35% is a good deal. Dealers will try to charge a freight charge but that's built into the msrp. You might negotiate a deal to below costs but the dealership deserves a modest profit.
What state is best to purchase new RV? ›
When considering the best state to buy an RV, take into consideration the state dealerships, the cost of the RVs, and any taxes or fees associated with purchasing an RV. Most commonly, the cheapest state to buy an RV is Montana. That's because no sales or property taxes are attached to the final price.
Is it financially smart to buy an RV? ›
Is an RV a Financial Investment? The short answer is no. With the exception of some in-demand vintage models, the value of an RV depreciates over time. An RV is an investment in a lifestyle, but you can mitigate the expense by renting it out when not in use through a third-party rental site like Outdoorsy or RVshare.
What is the economic impact of transportation? ›
A transportation network makes markets more competitive. Economists often study resource allocation—that is, how specific goods and services are used. A transportation system improves the allocation process because it widens the number of opportunities for suppliers and buyers.
What is the outlook for the RV industry? ›
Driven by an increased interest in domestic travel and the shift towards more remote work, the compound annual growth rate of the North American recreational vehicle (RV) industry is expected to grow by 7%, from US $18.36 billion in 2023 to US $26.96 billion by 2028.
What is the RV industry facts and figures? ›
Key RV Industry Statistics and Trends:
RV ownership is at a record high with 11.2 million households owning an RV in 2021. Approximately 1 million Americans live in recreational vehicles full-time. Over 40 million Americans regularly go RVing, with over 25 million RVing a year.
Is RV manufacturing slowing down? ›
At one point, there was a jaw-dropping 53% decrease in shipments compared to the previous year. While that gap has narrowed slightly to around 43%, it's essential to recognize that the RV industry is still facing a substantial decline in production.
