Persistent Constraints, Including Consumer Uncertainty and Tariff Impacts, Appear to be Easing
By NKBA Editorial Staff
As the new year gets underway, new insights point to stabilization and an expected gradual return to growth for the Kitchen & Bath industry in 2026 following three years of contraction.
The 4Q25 Kitchen & Bath Market Index rose to 55 from 50 in the previous quarter as residential kitchen and bath spending stabilized amid more widespread reports of growth. Three out of four industry segments reported stronger year-over-year sales, and one in four K&B firms now say that they are no longer being held back from growing – even though rising input costs from tariffs continue to significantly impact margins.
Meanwhile, NKBA’s 2026 Kitchen & Bath Market Outlook projects that U.S. kitchen & bath revenue, including both materials and labor, will grow by +0.1% to $228 billion in 2026, with momentum picking up in the second half of the year. Activity will be led by Repair & Remodeling, with spending forecast to increase by +2.9% in 2026. Pro-led K&B spending (+4.4%) is expected to continue outpacing DIY (+0.6%).
Here are some additional key insights from these two new research reports:
Existing Home Renovations Top New Construction
An increased share of K&B spending will come from existing home renovations this year. Homeowner and rental/investor K&B renovations ($124 billion) will account for a projected 54% percent of all spending, up +1% from last year.This trend is driven by in weakness in the new construction market, which is being limited by reduced homebuilding activity and efforts to reduce costs.
Design Industry Especially Bullish
Collectively, the four surveyed K&B sectors project growth of 5.4% in 2026 – up nearly a percentage point from the previous quarter – in the latest Kitchen & Bath Market Index. The design sector was particularly optimistic, increasing its growth projection (+15.8%) significantly from the previous quarter (+5.8%). Only the manufacturing sector downgraded its expectations, from +6.1% to +5.3%.
Concerns About Tariffs, Consumer Uncertainty and Costs Recede
While consumer uncertainty, tariffs/trade issues and rising building material costs continue to top K&B pros’ list of constraints to growth, fewer respondents reported these factors were holding them back. The impact of tariffs on building product prices, in particular, is being reduced through diversifying and reshoring supply chains, along with waivers for many product categories.
Growth Driven by Older, More Affluent Homeowners
Significant household growth in 2026 will come from households over the age of 65, with increasing demand for senior-friendly products and features focused on aging in place. Luxury kitchen and bath providers will continue to outperform in 2026, bolstered by high net-worth consumers who are less affected by elevated interest rates and product prices. These consumers are more likely to realize their renovation plans and invest in higher end products and finishes.
“While affordability challenges haven’t gone away, we expect to see more consumers move forward with projects as borrowing rates and product prices hopefully begin to ease,” said Bill Darcy, Global President & CEO, NKBA | KBIS. “Factors like the skilled labor shortage and high labor costs will continue to hold some K&B companies from realizing the market’s full potential, but over all, there are positive signs about the year ahead.”
To access all of the new data and insights about the health of the K&B industry, read the full NKBA’s 2026 Kitchen & Bath Market Outlook and 4Q25 Kitchen & Bath Market Index reports.
