There’s no denying that 2024 has been a challenge, economically. What’s different about it, though, than tough years of the past is that it feels like we were all prepared for it. The writing has been on the wall. We’ve been waiting for it. There was ample time to prepare for it. And now it’s happening.

What’s encouraging through it all is how resilient the independent channel as a whole has been. And now, with the latest iteration of the National Kitchen & Bath Association’s Kitchen & Bath Market Outlook Update, we have some data to prove it.

According to the mid-year edition of the report, residential K&B spending is expected to dip just 2 percent to around $175 billion this year – an incredibly strong figure that shows the sector remains exceptionally healthy despite all the external economic factors that have been trying to eat away at it.

Relatively minimal dips in spending are expected in new construction and larger repair and remodeling categories, according to the report. Those, NKBA says, can be attributed to cautious consumer behavior, a slight slowdown in new housing starts, and the ongoing challenges with labor and material inflation and stubbornly high borrowing rates.

With a slowdown in larger projects, the NKBA’s report did find that the K&B market is noticing an increase in lower-spend price point projects, which are up about 10 percent this year, and DIY projects, which are expected to grow around 2 percent. In addition, while new home starts are down, NKBA pointed out that within the homebuilding market there’s been a decided shift toward smaller and entry-level home construction.

Biding Their Time

On track with the budding optimism we’ve seen from economists, the NKBA’s report notes that the future prospects for the industry all seem extremely positive.

Though the industry will remain in a wait-and-see period over the coming weeks – especially as we close in on the November election – there’s much to be optimistic about. All you have to do is look at the numbers the association highlights.

“This Market Outlook Update reflects the impact of an economy that continues to temper consumer behavior,” Bill Darcy, NKBA and KBIS Global President & CEO, said in a statement. “However, with the promise of reduced interest rates on the horizon – perhaps within weeks – there is a strong basis for optimism that more homeowners will finally begin to commit to the K&B projects they have been eagerly waiting to pursue.”

Beyond the expectation that interest rates will start to come down, the NKBA’s own report highlights some trends in consumer behavior that point to potential growth opportunities in the very near future. Among them, the fact that some 1.7 million homes will enter their prime remodeling years over the next four years.

In addition, the slowdown in higher-cost project spending and a reliance on DIY quick-fixes means consumers – particularly recent homebuyers – will likely look to make some major upgrades as the cost of goods and borrowing rates start to come down. The same can be said about the repair and remodel projects.

Consider this: Home equity in the U.S. has more than doubled over the past seven years, according to federal data. Today, we’re sitting on about $32.8 trillion in home equity (up from $15.6 trillion in 2017). The average consumer has about $299,000 in home equity, roughly $193,000 of which they can tap into, according to ICE Mortgage Monitor.

Beyond the numbers, NKBA found that there’s growing interest in starting home projects. Particularly, they found, K&B project inquiries improved compared to prior quarters, as did the number of leads generated for high-end projects.