Texas Bucks Trend with Continued Expectation of Double-digit Growth in 2025
By NKBA Editorial Staff
The first quarter of 2025 was dominated by heightened consumer caution tied to federal policy shifts, especially the impact new tariff rates could have on pricing. K&B professionals in the West and Northeast interviewed for the Q1 2025 Kitchen & Bath Market Index Survey were among those expressing the biggest impact of this dynamic on their businesses.
While K&B industry sales flattened in Q1 2025 across the country, slower sales were most concentrated in the West, where the YOY change in kitchen and bath sales averaged across all K&B firms ranged from -1% in California to -3% in the Southwestern U.S. and -5% in the Northwest region.
Some other notable regional insights from the NKBA / John Burns Q1 2025 Kitchen & Bath Market Index (KBMI) report:
Market Weakness in the West, Northeast
Kitchen and bath market weakness was most concentrated in the West, and to some extent, in the Northeast during the first quarter of the year. Many industry professionals in these areas noted that consumer enthusiasm and demand were cooling off because of worries related to tariffs.
Affordability remains a major strain on coastal markets. Some California households, rebuilding post-wildfires, are reportedly downgrading the scope of their reconstruction projects. Several Northeast firms also reported negative market impacts from federal job layoffs.
Outlook Cools Down in the Midwest
Strong demand drivers in the Midwest were hampered by increasing consumer caution. K&B firms in the region reported pockets of strength from boomers and older homes coming due for remodels. Backlogs in the Midwest were solid, but this was largely due to acute labor shortages limiting the pace of growth. Client leads reportedly came to a “screeching halt” in Q1 2025 following major tariff announcements in April. Firms’ average expectation for 2025 revenue growth in the area cooled significantly from 6% to 2% QOQ.
Slowed Momentum in the Southeast
While Southeast spending was on an upswing in early 2025, this progress seems to have stalled. K&B industry optimism slowed in late Q1 2025. Backlogs declined QOQ and firms reported slower revenue growth expectations of 3% YOY on average in 2025, down from 5% in Q4 2024. One bright spot is that affluent luxury clients in Florida remain as resilient as ever, although declining home prices there have tempered broader demand. Some industry pros hope this could lead to increased fix-and-flip-related renovation activity.
A Brighter Picture in Texas
Many of the surveyed Texas K&B building and construction firms still expect robust growth this year. As of Q1 2025, Texas pros expected revenue growth of 10% YOY on average, unchanged from the prior quarter. This overperformance was, in large part, driven by renovations undertaken by affluent older consumers, along with consumers priced out of buying new homes. Still, a number of firms said tariff-related impacts, including rising prices, are tempering optimism and inhibiting greater growth potential.
“Although the numbers varied from region to region, it’s clear that the uncertainty around tariffs and prices has many consumers across the country still stuck in wait-and-see mode,” said NKBA I KBIS Global President & CEO Bill Darcy. “As the picture on tariffs and their impact comes into better focus, consumers will have better information so that they, in partnership with their professional K&B design partners, can budget their projects accordingly.”
For additional insights into what K&B industry pros across the nation are saying about the state of the industry and what lies ahead, download the NKBA / John Burns Q1 2025 Kitchen & Bath Market Index (KBMI) report here.
