HACKETTSTOWN, NJ — Although forecasts for low- and mid-range project spending have each been revised upward, it’s the high end of the kitchen and bath market that will “shine” in the months ahead, according to the latest forecast issued by the National Kitchen & Bath Association.
According to the latest NKBA forecast, released this summer, the high end of the kitchen/bath market is now expected to surge by more 28% compared to 2020 – topping the association’s initial 19.8% projection) – as pent-up demand, robust savings and sharply rising home appreciation “encourage homeowners to go the extra mile” when it comes to spending.
In its latest market forecast, the Hackettstown, NJ-based NKBA revised its 2021 industry sales projection to $170.9 billion in kitchen and bath spending, up by 21.4% from 2020’s $140.8 billion and nearly 8% higher than the association’s initial estimate for the year. New construction kitchen and bath spending is now expected to exceed 2020 by 28.5%, while kitchen and bath remodeling expenditures are expected to climb by 12.5%, according to the NKBA. Total kitchen spending (new construction and remodel) is now targeted at $81 billion, with bath spending estimated at $89 billion, both more than 20% above last year and appreciably higher than the NKBA’s initial forecast.
The “red-hot market,” according to the NKBA “is a continuation of a positive ‘perfect storm’ that began in the second half of last year and hasn’t let up, all related in one way or another to the COVID-19 pandemic.
“First came the buildup of savings, as homeowners experiencing the unknowns of the COVID-19 lockdown decided to err on the side of caution,” the NKBA said, adding that “much of it wasn’t voluntary, as spending on dining, entertainment, travel and leisure came to a screeching halt.
“Adding to the dramatic savings growth were the generous government stimulus programs that poured $5 trillion into the hands of consumers. As homes suddenly began doubling as schools and offices, configuration changes practically became mandatory. The kitchen morphed into the family hub and previous health and wellness trends for both bathroom and kitchen accelerated in urgency. And all that extra time at home made more homeowners realize a makeover was badly needed.”
“Add to that record-low interest rates that have made home-related loans very attractive, and steep home appreciation with demand far outstripping supply, and all the elements have neatly fallen into place.”
Among the NKBA’s other key conclusions:
n Home Improvement Tops Discretionary Spending: Nearly 1 in 3 homeowners plan to boost their home-improvement discretionary spending this year, well above the 1 in 5 (or fewer) who plan such increases for eating out, entertaining, travel or health. In fact, the average home-improvement project price point is 25% higher than last year, according to the NKBA.
n Kitchen & Bath Are Top Choices: For those planning home improvements this year, kitchens and primary baths rank #1 and #2, respectively, among a dozen home areas offered. More than half of those surveyed (55%) said they planned to remodel their kitchen, while 40% cited their primary bathroom. Exterior (37%), patio/deck (29%) and primary bedroom (29%) round out the top five areas for anticipated remodeling, the NKBA said.
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PALO ALTO, CA — More than three quarters of businesses in the construction and architectural/design services sectors report that product and material shortages and costs impacted their businesses in the second quarter of this year, while more than half of firms in both sectors report labor shortages and costs impacted their businesses, according to Houzz, Inc., the Palo Alto, CA-based online platform for home remodeling and design.
According to the Q3 2021 “Houzz Renovation Barometer” – which tracks residential renovation market expectations, project backlogs and recent activity – more than nine in 10 businesses across both sectors reported second-quarter increases in costs for lumber, copper, steel and aluminum, although about half of the surveyed businesses do not believe that costs will continue to increase in this year’s third quarter. Additional materials that construction pros anticipate increasing in cost include plastic, concrete, paint, foam, and drywall. Interior designers anticipate increased prices for appliances, furniture, and cabinetry in the third quarter, Houzz said.
More than nine in 10 construction businesses report moderate to severe skilled labor shortages, with carpenters, laborers, framers, cabinet specialists and plumbers in particularly short supply.
The Houzz Barometer also revealed that construction pros experienced their busiest quarter in six years, and that confidence among construction and design businesses for home renovation activity remains strong.
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WASHINGTON, DC — Soaring building material costs, high demand and low inventory have added tens of thousands of dollars to the price of a new home, causing housing affordability to fall to its lowest level in nearly a decade during the second quarter of 2021, the National Association of Home Builders reported.
According to the NAHB/Wells Fargo Housing Opportunity Index, released in August, 56.6% of new and existing homes that sold between the beginning of April and the end of June were affordable to families earning the U.S. median income of $79,900. This is down sharply from the 63.1% of homes sold in the first quarter of 2021, and the lowest affordability level since the first quarter of 2012, the NAHB said.
NAHB analysis reveals that higher costs for lumber products have added nearly $30,000 to the price of an average new single-family home, observed Robert Dietz, chief economist for the Washington, DC-based trade association, who reported that the national median home price surged to a record $350,000 in the second quarter, up $30,000 from the first quarter, the largest quarterly price hike in the history of the series.
“With the U.S. housing market more than 1 million homes short of what is needed to meet the nation’s demand, policymakers need to focus on supply-side solutions that will enable builders to increase housing production and rein in rising home prices,” Dietz said.
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KOHLER, WI — Kohler Co., the Kohler, WI-based manufacturer of plumbing products, tile, cabinetry and lighting, has outlined a series of steps the company is taking to adhere to corporate commitments tied to social, governance and environmental issues.
Kohler’s 2020 Believing in Better Metrics Report, released in August, addressed the progress being made to reduce the company’s GHG emission intensity, waste-to-landfill intensity, water-use intensity and other key initiatives.
“While Kohler celebrates creativity, diversity and innovation in all its forms, we know we can do more to protect the planet, build resilient communities and enrich the quality of life for everyone,” said Laura Kohler, senior v.p./human resources, stewardship and sustainability.
Among the highlights of Kohler’s “Believing in Better” initiative were:
n A reduction in operational intensities since 2008 that has cut net greenhouse gas emissions by 48%, operational energy use by 22%, waste-to-landfill by 47% and water use by 46%.
n Generated more than $1 billion in sales from environmentally favorable products in 2020.
n Completed more “Design for Environment” (DfE) projects, an incubator for developing products that are better for the planet, than in all previous years combined.
n Pivoted manufacturing facilities to produce and donate 80,000 face shields for frontline workers during the height of the COVID-19 pandemic.
n Provided 3,500 showers for the unhoused.
n 26 teams competed in the annual Innovation for Good I-Prize, an internal competition that encourages associates to develop solutions with a social purpose. Three ideas were awarded funding for incubation.
n More than 1,600 associates from around the world united around various communities and their allies, including launching a “hate has no home” education and fundraising campaign.
“Kohler is committed to providing access to safe water for communities around the globe, delivering innovative solutions to address pressing social issues and strengthening its efforts around diversity, equity and inclusion,” Laura Kohler said.
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