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NKBA’s 2021 market outlook report predicts 16% growth

[25/02/2021]

Feb. 25, 2021 - The United States is the world's largest importer of kitchen and sanitary products, and the market is very important for kitchen and sanitary enterprises. The National Kitchen & Bath Association (NKBA) today released its 2021 Market Outlook report, revealing the industry is poised for continued growth with overall spending for both kitchen and sanitary projects to increase in the coming year.

 

The industry anticipates a pronounced rebound in overall industry growth - from -5.9% in 2020 to 16.6% in 2021, compared to 9% in 2018 and 1% in 2019. At the same time, new housing is expected to grow by more than 22%, while renovation projects will grow by 10%. High end and mid-range projects are expected to take the lead, both of which are expected to grow by 20% over last year. Homeowners cite the kitchen and bath areas as two times more important than other spaces within the home, and the kitchen particularly gained status throughout the COVID-19 pandemic, with 70% of homeowners considering it extremely important compared to 64% prior to the crisis. As people pay more attention to these family areas, it is expected that large-scale interior renovation projects including kitchen renovation will usher in a new round of changes. This year may see a shift from the owner DIY boom in 2020 to the need for professional kitchen and bathroom installers, many of which may be delayed by homeowners during the pandemic because of the risk of installers' mobility.

 

The study saw a number of project motivators and inspirations that continue to drive renovations:

 

Although large and more professional projects are planned to increase this year, the main reasons for the improvement of independent DIY are that owners pay attention to saving money (25%), implementing projects in leisure time (23%) and health and safety issues (22%).

 

Households indicate that improving the home’s aesthetics are the main motivators for remodels in the bathroom (16%) and kitchen (15%), followed by maximizing quality and durability, and increasing the value of the home.

 

Owners pursuing cost-effectiveness and maximizing the use of existing budgets focus on renewing cabinets (52% of projects), plumbing (43% of projects), smart home products (57% of projects), and water purification systems (54% of projects) %) is the focus of the kitchen upgrade.

 

Both household income and family structure affect the consideration of kitchen renovation costs. "Mature families", that is, families over 45 years old and without children, have the highest proportion of upgraded kitchen functions.

 

Google search and social media are the main sources of inspiration for kitchen and sanitary renovations. Most owners stated that they rely on more than one source to inspire inspiration for the renovation. Young single homeowners or couples tend to rely more on Google and Instagram, while adults over 45 value inspiration from other families.

 

The economic indicators that may affect renovation activities include:

A 10% increase in the operating rate of single-family housing in 2020 will drive a 17% increase in new residential building materials in 2021.

 

Of the total expenditure on residential kitchens and bathrooms, new houses accounted for 57%, reaching $90 billion, residential renovations accounted for 43%, reaching $68.6 billion.

 

Mortgage interest rates, which are about 1% lower than a year ago, will continue to drive the home buying boom.

 

With a record low for-sale inventory, housing stock is set for price appreciation, which will serve to increase homeowners’ decisions to pursue large-scale remodels. The study forecasts an approximate 31% total house price appreciation between 2020-2023 driven by both the supply shortages and underlying demand.

 

The research report predicts that, driven by supply shortage and potential demand, total house prices will appreciate by about 31% between 2020 and 2023.

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