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The National Kitchen & Bath Association — a leading non-profit trade association for the kitchen and bath (K&B) industry providing tools, research, certification, and events for over 50,000 members – has released their baseline Kitchen & Bath Market Outlook Report for 2023. The report indicates that the year ahead will be a challenging time for both residential construction and the kitchen and bath industry. Inflation and mortgage rate increases have effectively reversed the momentum the industry enjoyed in 2020 and 2021.
NKBA estimates that K&B spending will total $162.4 billion in 2023, a year-over-year decline of 14 percent. Although this estimate is down from the record highs of 2022, it's still strong relative to pre-pandemic levels. K&B spending in new homes is expected to decline 17 percent, while remodeling spending is expected to fare better, falling 10 percent.
Remodeling will sustain the industry in 2023. A few factors are helping to drive demand for K&B remodels even during these uncertain economic times. First, the number of homes entering their prime remodeling years (20-39 years old) will grow by 2.9 million by 2027, and these homes have 15-24 percent more K&B remodels than the U.S. norm. Next, nearly 90 percent of outstanding mortgages are locked in at rates below 5 percent, so these homeowners are choosing to remodel rather than move. Finally, since housing inventory will remain low in 2023, demand for single-family rentals (SFR) will remain strong and fuel the industry in 2023. Thirteen percent of all K&B remodeling spending in 2023 will come from renovations to SFR properties (i.e., $8.5B out of $66.7B).
Key takeaways include the following:
For a copy of the NKBA 2023 K&B Market Outlook report, contact Brittany Loeffler at email@example.com.