According to the National Kitchen and Bath Association (NKBA), 2023 kitchen and bath remodeling revenues are expected to add up to approximately $162.4 billion. But how does that compare to previous years? And, what determines whether or not homeowners will actually bite the bullet and spend those remodeling dollars?
In short, the NKBA’s predicted remodeling revenues reflect an approximate 14% decrease compared to last year around this time. Now, let’s take a closer look at who will or won’t be remodeling and why.
5 Factors Driving Kitchen and Bath Remodeling in 2023
1. Household Savings (Or Lack Thereof)
According to statistics reported by NKBA, the average savings rate of an American household in December of 2021 was 7.5%. That number declined to a meager 2.3% in October 2022 and is expected to remain low in 2023. With fewer funds in savings, homeowners may delay kitchen and bath remodeling projects, at least for the time being. Those who do choose to go ahead with home renovations will likely find that their funds won’t stretch as far, thanks to inflation and increased labor and material costs.
2. Current Mortgage Rates
The NKBA also reported that with current mortgage interest rates hovering around 6.3%, many Americans are choosing to stay in their current homes vs. moving to another or building a new one. On existing mortgages, approximately 90% are at rates less than 5%. For these homeowners, kitchen and bath remodeling is expected to outperform new construction, even though total remodeling dollars spent are anticipated to be less than previous years.
3. Pandemic “Settlers” Looking to Upgrade Their Homes
During the height of the COVID-19 pandemic, some individuals hurried to settle down and purchase homes. Commonly referred to as “settlers”, these homeowners have now been living in their homes for many months. Because of this, they have a good idea of what’s working and what isn’t for their family’s lifestyle. Of the homeowners who do schedule kitchen and bath remodeling projects this year, a good portion of them are expected to come from this population.
4. Single-Family Rental (SFR) Market
Current real estate market conditions reflect a low housing inventory. This has led to increased popularity of single-family rental units. Real estate investors wanting to fill vacancies or attract ideal tenants are expected to utilize kitchen and bath remodeling to upgrade their properties.
5. Aging Homes Needing Kitchen and Bath Remodeling
2023 marks a time period approximately 20 years removed from the housing boom of the mid-2000s. Homes built during this era are now past their prime and can certainly use upgrades or remodeling. With the average kitchen remodel lasting 10-15 years, there’s a good chance that appliances and materials are wearing out. Or, family needs and design trends have significantly changed. In any case, many of the individuals planning a kitchen or bath remodel in 2023 are expected to come from this category of homeowners.
Professional Kitchen and Bath Remodeling in Orange County, CA
Sea Pointe Design & Remodel has been meeting the remodeling needs of Orange County residents for almost 40 years. And, regardless of whether or not the 2023 kitchen and bath remodeling forecast comes true, we’re here for you every step of the way! Our remodeling clients have come from all over Orange County, including Irvine, Laguna Niguel, San Clemente, Newport Beach, Corona del Mar, Lake Forest, Mission Viejo, and more.
To learn more about the type of work we do, browse through our online portfolio of completed projects. Or, register for one of our upcoming remodeling webinars to learn helpful remodeling tips from the pros.
Then, when you’re ready to start planning your own remodeling project, simply give us a call at (949) 861-3400 or fill out the form below to schedule your complimentary design consultation.