Remodelling Projects to Sustain Kitchen, Bath Market in 2023

It’s going to be a challenging year for both residential construction and the kitchen and bath industry.

This is according to the National Kitchen & Bath Association’s (NKBA) current market outlook.

Inflation and mortgage rate increases have effectively reversed the momentum the industry enjoyed in 2020 and 2021. Inflation, in particular, has chipped away at homeowners’ savings that peaked during the pandemic.

The probability of a recession over the next 12 months has also increased to 63 per cent, according to the Wall Street Journal forecasting survey.

NKBA estimates kitchen and bath spending will decline 14 per cent in 2023, for a total $162.4 billion US. Although this forecast is down from the record highs of 2022, it’s still strong relative to pre-pandemic levels.

Kitchen and bath spending in new homes is expected to decline 17 per cent, while remodelling spending is anticipated to fare better, falling 10 per cent.

Remodelling will sustain the industry in 2023, according to the NKBA report. A few factors are helping to drive demand for kitchen and bath remodels even during these uncertain economic times. The number of homes entering their prime remodelling years (20 to 39 years old) will grow by 2.9 million by 2027, and these homes have 15 to 24 per cent more kitchen and bath remodels than the U.S. norm. Next, nearly 90 per cent of outstanding mortgages are locked in at rates below five per cent, so these homeowners are choosing to remodel rather than move. Finally, since housing inventory will remain low in 2023, demand for single-family rentals will remain strong and fuel the industry. Thirteen per cent of all kitchen and bath remodelling spending this year will come from renovations to these properties.

You Might Also Like