Older Homeowners and Millennials are Spending Most on Renovations
By NKBA Editorial Staff
The headline from the NKBA 2025 Kitchen & Bath Market Outlook report is an expected return to modest growth this year — the report projects that U.S. residential kitchen and bath spending will increase by 0.8% to $235 billion in 2025, up from $233 billion last year.
Generally speaking, households motivated by life events, lower borrowing costs, and high home equity levels are expected to spend more on kitchen and bath projects in 2025. But a deeper dive into the report and its data-driven insights offers important clues into specific demographic trends that are impacting the health of the K&B industry.
Here are a few key findings:
Spending increases with wealth accumulation and life events.
Focusing on the factors influencing K&B spending, the research highlights two key life stages that move homeowners to invest in renovations. The first typically occurs when homeowners are nearing 40 years old, with life events and increased wealth serving as catalysts for home renovations. The other occurs with homeowners aged 55 to 59 years old as they prepare to make home improvements that will allow them to age in place.
Some K&B pros report strong results from boomer-aged clients, who tend to have larger amounts of home equity to leverage. These older homeowners either tap into that equity to make improvements to their existing homes, or, when they sell and downsize, use it to improve their new, smaller home.
More millennial households are pursuing large remodels
As the number of millennial households (35-44) grows in 2025, they are expected to take on larger remodeling projects. In contrast to the decline in boomer households, millennials represent a new and expanding wave of homeowners moving into their prime renovation years. It’s a trend that is expected to continue as this group ages and shifts into an ownership phase of life.
The impact of older homeowners and their aging-in-place remodels
The biggest drivers of K&B spending continue to be homeowners born before 1970 (currently aged 55+), who now control $110 trillion in wealth. Those born in the 1960s have a collective net wealth of $44 trillion, which is almost twice as much as those born in the 1970s ($23 trillion) and four times as much as people born in the 1980s ($10 trillion).
While younger households are emerging as a growing force in the K&B market, older households – especially those aged 55 and above – continue to dominate spending. Their wealth accumulation, particularly in home equity, enables larger-scale renovations, ensuring they remain a key driver of market growth.
Older households move less than younger households, increasing the importance of aging-in-place remodels. More than half (56%) of owner households are headed by someone aged 55 or older. The aging of the U.S. household population continues to put more emphasis on aging-in-place remodels vs. remodels by recent movers.
High-income homeowners, high-cost renovations
Predictably, high-income homeowners are most likely to embark on high-cost renovations. In turn, these highest-priced projects – specifically kitchens above $100K and bathrooms above $60K – are expected to drive 22% of industry activity in 2025, making these high-value renovations a key contributor to overall market growth.
Most homeowners finance their K&B remodeling projects with cash. Nearly three-quarters (71%) of funding for K&B projects comes from cash or savings reserves. Home equity is the next biggest source of funding (10%), although home equity’s contribution to K&B renovations is significantly larger for big projects like kitchen and bath additions and full kitchen remodels. This number could continue to rise, as Americans now have more than $35 trillion in home equity, up 81% from the end of 2019 — an average of about $406,000 per U.S. homeowner – and financing conditions improve.
“It’s important to pay attention to the generational and income factors that will have a major impact on the health and growth of the K&B industry in 2025,” said NKBA I KBIS Global President & CEO Bill Darcy. “While older homeowners, many with significant cash and savings at their disposal, continue to be an important growth engine, it’s encouraging to see more millennial-aged homeowners moving forward with large K&B renovations.”
To learn more about the demographic trends that are shaping the K&B market, download the full NKBA I KBIS 2025 Kitchen & Bath Market Outlook report here.
