FEBRUARY 2024 RETAILOBSERVER.COM
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PROFESSIONAL VERSUS DIY
Professional spend, which will be leading the decline in K&B spend
during 2024, is forecasted to decline by 4 percent to $148 billion,
while DIY will grow slightly by 2 percent to $25 billion. Many
consumers will undertake simpler patch-fixes in the kitchens and
baths of their homes until they have the funding needed for larger,
professional remodels.
HOUSING INDUSTRY AND ECONOMIC FACTORS
Since the publication of the 2023 Kitchen & Bath Market Outlook
Update seven months ago, mortgage rates have remained elevated,
but inflation has been muted, the job market is strong and a recession
is less likely than previously predicted.
As seen in 2023, high mortgage rates in 2024 will incentivize
homeowners with lower mortgage rates to remodel versus sell. About
80 percent of outstanding mortgages are locked in at rates below 5
percent, which is substantially lower than current rates and driving
them to stay put.
Household savings rates have significantly declined from pre-
pandemic era highs and remain below pre-pandemic levels. As a
result, the excess savings that helped the remodeling boom has
decreased significantly.
The risk of recession remains, though the probability has gone
down to below 50 percent, according to the Wall Street Journal
Forecasting Survey.
THINGS ARE LOOKING GOOD, LATER ON
The long-term outlook for kitchen and bath remodels remains
strong. Over the next five years, an additional 2.2 million homes will
enter their prime remodel years. Additionally, homeowners are sitting
on record levels of home equity that they can tap into once rates
stabilize. And R&R projects being deferred in early 2024 will add to
the demand in coming years.
While economic and housing market factors have dampened the
growth of K&B, and some declines are expected, the
industry remains strong and can expect things to improve
in the future. To download the full report, free for members
and $1,995 for non-members, scan the QR code.
RO
Design: Svetlana Tryaskina | Photo: Mike Chajecki and Victoria Malanowski
Design: Gina D'Amore Bauerle | Photo: Tim Gormley
