Expectations for an uptick in the nation’s design, construction and remodeling sectors remain generally high, although results thus far in 2025 are decidedly mixed. Among the key statistics and forecasts released in recent weeks by government agencies, research firms and industry-related trade associations were the following:
Housing Starts & New Home Sales
A limited amount of existing inventory coupled with solid demand helped new-home sales end 2024 on a positive note, even as buyers continue to grapple with affordability challenges, according to the National Association of Home Builders. Builders are “cautiously optimistic” about the new-construction market for 2025, “given ongoing solid macroeconomic conditions, particularly for the labor market, as well as a post-election policy reset that seeks to eliminate unnecessary regulations,” the Washington, DC-based NAHB said. New single-family home inventory – an 8.5 months’ supply at the current building pace – is up about 10% compared to a year earlier, according to the latest available statistics. Completed ready-to-occupy inventory is up 46% compared to a year ago, said the NAHB, which estimated that the combined new and existing-home supply is currently at a four-months’ level, the lowest since April of 2024. The market has not been near a six-months’ supply since 2012.
Residential Remodeling
“Strong” results in the fourth quarter of 2024 are fueling optimism among businesses across the nation’s residential construction, architecture and design sectors, according to a report from Houzz Inc., the Palo Alto, CA-based online platform for home remodeling and design.The Q1 2025 “Houzz U.S. Renovation Barometer,” released in recent weeks, found that expectations among design and construction professionals are at their highest level since the third quarter of 2022, said Houzz.“Strong Q4 performance and recent federal interest rate cuts have bolstered confidence among industry professionals,” said Marine Sargsyan, staff economist for Houzz. “With this solid foundation, construction firms are expressing the most positive sentiment we’ve seen in two and a half years.”
Cabinet & Vanity Sales
Sales of kitchen cabinets and bathroom vanities, impacted by elements such as inflationary pressures, sluggish home sales and other industry headwinds, declined in 2024 compared to a year earlier, the Kitchen Cabinet Manufacturers Association reported. According to the KCMA’s latest monthly “Trend of Business Survey,” participating manufacturers reported that overall cabinet and vanity sales as documented in 2024 were down 3.4% from the same 12-month period in 2023. Annual declines were reported for stock cabinets (-12.1%), as well as for semi-custom (-5.4%) and custom units (-15.6%), the Reston, VA-based KCMA reported.
Market Analysis: ‘Cautious’ Homeowners Seen Focused Only on Essentials
CHICAGO, IL — Elevated materials, labor and borrowing costs, along with lingering economic uncertainty, continue to constrain large-scale remodeling projects, with “cautious” homeowners focusing on essential repairs and targeted upgrades rather than on large discretionary remodels. KEEP READING