Hackettstown, NJ – Offering a bullish forecast of 20% growth for large-scale and mid-range remodeling in 2021 vs. 2020, the National Kitchen & Bath Association (NKBA) expects two factors to feed that growth: appreciating values of existing homes; and overall new construction, which will rise about 9% for the year, atop 10% growth in 2020.
New construction gains will be concentrated on single-family homes, as consumers pull away from multi-family residences, an effect of the COVID-19 pandemic.
As to remodeling, consumers remodel when they feel their homes are appreciating in value. And based on a housing supply shortage that will persist for some time, as well as strong demand for existing homes due to low interest rates, the report projects substantial home appreciation through 2023.
For the full year kitchen and bath project revenues are projected at $158.6B, a 16.6% increase over 2020. This number includes both remodeling and new construction work. Drilling down, the money is gravitating to what NKBA calls High-spend Price Point ($17,700+ kitchens) and Mid-spend Price Point ($2,200-$17,700) projects, both categories approaching 20% gains over last year. Low-spend Price Point projects ($2,200) will grow 9.7% to $40.4B. High-spend will grow 19.8% to reach $55.9B. Mid-spend will grow 18.5% to reach $62.3B.
Kitchen and bath projects for new construction are forecast to grow more than 22% to $90B vs. 10% growth for kitchen and bath remodeling to a total $68.6B.
The 22% growth that NKBA forecasts for 2021 in new construction is significantly higher than projected 2021 housing starts would suggest. That’s because a large number of homes that were sold in 2020 will not be completed until 2021. “There is always a lag between starts and completed homes,” says an NKBA spokesperson. “But as a result of COVID and the large numbers of people who left cities and bought homes elsewhere, that lag is larger than usual, with the result that many 2020 starts will see completion in 2021.”
The 2021 NKBA Market Outlook report aimed to provide a thorough assessment of how COVID-19 and related economic and housing market trends are impacting the kitchen and bath industry. NKBA commissioned the John Burns Real Estate Consulting firm (JBREC) to conduct the study. Various government and industry sources, internal forecasting models, and over 4,700 online surveys of homeowners who had initiated a home improvement project since the start of the pandemic were used to arrive at the findings.