GREEN BAY, WI — Key residential product segments, including kitchen cabinets, will “continue to get squeezed” by a pivot to smaller-scale, less expensive remodeling projects, as well as a shift within new construction to smaller-square-footage, entry-level homes.
That’s the prediction of leading construction market analyst John Burns Real Estate Consulting, whose latest forecast is that U.S. residential repair-and-remodel spending will be up in 2019, to $384 billion.
The Green Bay, WI-based construction market analyst predicted, however, that owner-driven, small-project remodeling spending will outpace big-project spending through 2022, as home prices moderate and wage gains spur minor home improvements and maintenance [and] “households opt for smaller projects like windows and doors rather than major renovations.”
According to John Burns, the six fundamental drivers of remodeling spending – income gains, home price appreciation, age of housing stock, existing-home sales, labor constraints and mortgage/lending conditions – continue to be “mixed.” Any growth in average remodeling spending will be entirely driven by labor and inflation costs, the market analyst said, adding that labor costs should continue to rise, but at a significantly slower pace than 2014-18.