The National Kitchen & Bath Association (NKBA) has released its July 2022 Kitchen & Bath Market Outlook. As the world’s leading association for the kitchen and bath industry, NKBA’s overall annual forecast still reveals a double-digit increase over 2021.
“This new market outlook report provides revised market size estimates and 2022 forecasts in the kitchen and bath industry, as well as gauges the economic and housing market shifts that continue to impact our market,” says Bill Darcy, CEO of the NKBA. “Despite some economic headwinds, kitchen and bath remodeling demand remains strong. Residential kitchen and bath spending is anticipated to grow by 16% to $189 billion in 2022.”
Although the spending is 16% higher than 2021, it is $10 billion lower than the initial forecast for 2022. Due to rapid home appreciation, higher-end activity has been revised to move upward for the second half of the year, and mid-range projects are expected to gain 20% making it the biggest year-over-year increase based on growth in new construction. Unchanged from the initial report is the 21% year-over-year new construction growth, which is projected to represent over 60% of the industry’s revenue.
The report notes that the second half of the year will see an uptick in remodeling because of several drivers including record-high homeowner equity per household, high number of homes in prime remodeling years, and 3 in 4 homeowners being locked into mortgage rates below 4%.
However, the NKBA also outlines recession concerns because of inflation and the three interest rate hikes this year. “We anticipate moderate declines in kitchen and bath spending in the event of a recession next year,” says Darcy. “Our view is informed by improved housing and consumer fundamentals and a likely less severe recession, relative to recent history if one were to occur.”
