New 2025 Kitchen & Bath Market Outlook and Q4 2024 Kitchen & Bath Market Index Reports Show Clear Signs of Expansion Despite Lingering Uncertainties
By NKBA Editorial Staff
Two new reports developed by NKBA’s research team provide a comprehensive analysis of kitchen and bath market trends and industry expectations for 2025.
Following two consecutive years of slight contraction, the kitchen and bath industry is poised for modest but meaningful expansion in 2025, according to key findings from the NKBA / John Burns Q4 2024 Kitchen & Bath Market Index (KBMI) and the 2025 Kitchen & Bath Market Outlook reports.
The Kitchen & Bath Market Index (KBMI) rose to 59.7 in the final quarter of 2024, an increase from 53.4 in the previous quarter, indicating some signs of industry strength despite ongoing uncertainties. Demand for kitchen and bath (K&B) products and upgrades strengthened as sales rose slowly across all segments.
Here are some of the additional insights about the strong close to 2024 and the positive outlook for 2025:
Important Fourth Quarter Momentum
Several key themes emerged from the Q4 2024 KBMI. Importantly, the Current Activity Index strengthened across all segments as industry pros report that consumer uncertainty appears to finally be ticking down with the resolution of the presidential election. K&B firms expect spending to increase with incremental confidence in the economy. More firms feel poised to meet their growth targets now, compared to Q3 2024, despite the lingering concerns around the skilled labor shortage and ongoing higher costs. Revenue growth averaged +3.4% year over year (YOY) in Q4 2024, as K&B manufacturers’ orders rose 2.5% and retailers’ sales grew by 4.4% YOY.
Positive Projections for 2025
K&B professionals expressed YOY revenue growth projections for 2025 ranging from +2.4% for retail sales firms to +7.5% for building and remodeling firms. Full-year 2025 revenue growth expectations averaged +3.7% YOY on a revenue-weighted basis. While existing home sales were down for the year, they increased during the final quarter of 2024. Remodeling-in-place appears to be a critical substitute for relocation moving forward. Only one in five K&B professionals say that weak existing home sales are holding them back.
The Big Picture: A Return to Gradual Growth
The NKBA Kitchen & Bath Market Outlook Report is more in-depth than ever — it now includes estimates for both consumer and investor K&B spending and insights from brand-new data sources. Based on this more sophisticated perspective, the report projects that U.S. residential kitchen and bath spending will grow by +0.8% to $235 billion in 2025 — up from $233 billion last year when applying the same new methodology.
Professional-led K&B remodels are expected to rise by 2.9% in 2025 and continue to outpace DIY activity (+0.6%) in 2025. In a reverse from 2024, remodeling spending on kitchen and bath products is expected to outpace new construction spending.
X-Factor #1: What Will the “Missing Middle” Do?
The big question for 2025 – one that will be key to a robust recovery in K&B remodels – is whether middle-income consumers will jump back into the renovation market after two years on the sidelines. These homeowners living in mid-range homes are the most likely to tap into home equity, but they’ve also proven to be the most rate sensitive. If short term borrowing costs drop, this critical group could finally embark on renovations in increasing numbers.
X-Factor #2: The Impact of Changing Federal Policies
The possibility of increased tariffs and changes to immigration policy could elevate the cost of kitchen and bath materials and labor. These potential policy changes present downside risk to the positive forecast for 2025, both directly through higher costs, and indirectly through the pace at which the Fed lowers interest rates if progress on inflation stalls in 2025.
“There’s no doubt this new research will be the subject of much conversation at KBIS 2025 as we explore where our industry is heading and why we feel hopeful and optimistic heading into Q2 and beyond,” said NKBA I KBIS Global President & CEO Bill Darcy. “While our industry is poised to finally realize much-anticipated growth in 2025, we have to keep a close eye on some key uncertainties that could hinder this expansion.”
For more insights into where the K&B industry is heading this year, download and read the full 2025 Kitchen & Bath Market Outlook and Q4 2024 KBMI reports.
