Housing Market Challenges Set to Boost Renovations, NKBA CEO Says

The housing market is facing numerous challenges, with affordability and supply constraints being among the most pressing issues. These challenges are driving homeowners to renovate their existing homes rather than relocate, creating opportunities for the kitchen and bath industry. According to Bill Darcy, CEO of the National Kitchen & Bath Association (NKBA), the current housing market conditions are set to boost renovations in the kitchen and bath sectors.



The aging housing stock, record levels of home equity, and favorable demographics are creating positive growth prospects for the remodeling sector in 2025, according to the National Association of Home Builders (NAHB). Homeowners are increasingly choosing to tap into their home equity and invest in improvements rather than relocate, creating long-term growth prospects for the industry. This trend is driven by the fact that homeowners feel much better investing in their asset when it's appreciating, as seen during the pandemic-led real estate and remodeling boom.

Moreover, the NAHB/Westlake Royal Remodeling Market Index (RMI) survey shows that 98% of remodelers cited that most or some of their consumers are familiar with the aging-in-place concept, indicating a significant increase in awareness among consumers over the last two decades. This awareness creates additional opportunities for growth in the market, as homeowners seek to adapt their homes to their changing needs and preferences.

The ongoing housing affordability challenges, such as persistently high borrowing rates and a shortage of available homes, also play a significant role in homeowners' decisions to renovate. Many first-time homebuyers are compelled to purchase newly built homes that don't necessarily match their vision for their first home but have little choice based on market conditions. As a result, these homeowners may choose to renovate their homes to better suit their needs and preferences, rather than relocate to a more expensive or less suitable property.

Furthermore, the lack of available homes for sale has led to an increase in the number of homeowners choosing to stay in their current homes and renovate, rather than moving. This trend is further exacerbated by the fact that many homeowners secured mortgages when rates were more favorable and do not want to take on higher mortgage rates by moving.

The shift towards smaller, more affordable homes has led to an increase in the demand for renovations that can maximize the use of space and improve functionality. Builders are innovating with smaller, more efficient home designs that feature multi-use spaces, like flex rooms and nooks, and minimize underutilized areas like hallways. This trend reflects changing buyer priorities, including the desire for functionality and affordability without sacrificing comfort.

In conclusion, the current housing market challenges, such as affordability and supply constraints, are driving homeowners to renovate their existing homes rather than relocate. This trend is set to boost renovations in the kitchen and bath sectors, creating opportunities for the industry. As the population continues to age and family structures evolve, the need for renovations that cater to these changing needs will likely remain strong, driving continued growth in the home renovation market.