Residential Kitchen/Bath Market: $130.8 Billion in 2020
HACKETTSTOWN, N.J. –Covid-19 took its toll on U.S. residential remodeling this year, notes a major industry group, but not all the news is bad.
The National Kitchen & Bath Association (NKBA) acknowledged that a variety of concerns stemming from the coronavirus led to a double-digit drop in spending in 2020’s first half, but there’s signs of a business uptick as lockdown restrictions slowly ease across the country.
The NBKA issued a modified edition of its 2020 Kitchen and Bath Market Outlook in late June, updated to account for dramatic changes in the industry resulting from the COVID-19 crisis.
“Our initial 2020 Kitchen & Bath Market Outlook was conducted in late 2019, before the pandemic hit our members and homeowners in the U.S. & Canada,” said Bill Darcy, NKBA CEO. “Kitchen and bath spending had been increasing steadily prior to the pandemic at 9% in 2018 and 4% in 2019. As such, the original report projected a strong 2020, bolstered by an especially bright Q1.
“While the COVID-19 crisis, unsurprisingly, led to a double-digit decline in spending across all major categories, we are already seeing signs of positive growth as shelter-in-place orders are lifted, and we’re optimistic about the industry’s long-term health.”
NKBA also commissioned John Burns Real Estate Consulting (JBREC) to field the study. Selected highlights of the updated report include:
• As of mid-April, 81% of kitchen and bath remodeling projects were postponed or canceled, but homeowners said they plan to reschedule 70% of those projects in 2020, an encouraging sign.
• Kitchen spending was more impacted than that of bathrooms, declining by 25% compared to 18% for master bathrooms and 14% for secondary baths.
• Similarly, medium and large projects suffered the biggest losses, with spending predicted to decrease by 22% compared to prior expectations. Spending on smaller projects is anticipated to decline only 14%.
• For projects that continued through the pandemic, designers were less likely to be used, at a rate of 25% compared to 38% pre-COVID-19.
More than one in four homeowners (28%) cited limited finances as an impact of COVID-19 on remodeling plans. But some noted unexpected benefits as well, including more time to pursue DIY work (11%) and more involvement in the design and planning of projects (5%).
For the 19% of remodeling jobs that carried on through the crisis, more used DIY, with only 35% saying they hired a professional to do all the work, compared to 50% of those with projects completed earlier in the year and 42% of those who postponed. One of every three continued projects (34%) relied on a combination of DIY and a professional or friend, compared to 28% of postponed and 14% of completed.
More than six in ten homeowners (64%) still use cash from savings to finance a kitchen or bath remodeling project. Active projects in mid-April were more likely to be paid by credit card (19%) compared to deferred projects (13%), and deferred projects were far more likely to be financed with a home equity loan (11%, compared to 2% of active projects).
Nearly one-third (31%) of Americans say the pandemic has changed the way they use or think about their kitchen or bath. That number increases to 38% when at least one member of the household is working from home.
When asked if they wanted to undertake renovation work in their kitchen or bath in response to the pandemic, 19% of households with at least one member working from home said yes, while 16% of all households and 11% of those in which no one works from home agreed.
The data presented in this report is compiled from a variety of government and private-industry sources, as well as a survey of 500 consumers to better understand the impact of the COVID-19 pandemic on spending levels.
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