One group of homeowners is likely to temper the expected short-term dip in residential kitchen and bath spending in 2024: high-income households.
According to NKBA’s 2024 Kitchen & Bath Market Outlook, the highest-income tier households are usually less rate-sensitive and, while the kitchen and bath remodel demand from this segment is expected to decline modestly in the short-term, it is likely going to be a key driver of the anticipated rebound in spending beginning later this year.
Households with an income of $160k per year or more are far more likely to fund renovations using savings (76%) than through borrowing tied to interest rates (14%). While this segment of homeowners appears to be generally less positive about their personal financial situation compared to just a year ago, projections suggest that they are becoming less cautious about undertaking major remodels. Many will finally move forward with remodeling projects in 2024 and into 2025 that they put off during the pandemic period.
In addition to more sizable savings resources, high-income households tend to have greater home equity. There are indications that more of these homeowners are preparing to access equity via HELOC accounts as rates are expected to continue falling over the course of the year.
To read more about the outlook for the kitchen and bath industry, download NKBA’s 2024 Kitchen & Bath Market Outlook report here.