NKBA Global Connect hosted a webinar revealing exclusive research tailored to the international kitchen and bath community and offered a preview of KBIS 2026.
By Dianne M. Pogoda
The North American kitchen and bath market is poised for growth despite the economic uncertainties swirling around tariffs, fears of inflation, material costs, and evolving immigration policies.
These insights and more were revealed during a wide-ranging webinar hosted by NKBA Global Connect, which detailed key points of two NKBA research studies — the 2025 North American Kitchen & Bath Market Outlook (KBMO) and the quarterly Kitchen & Bath Market Index (KBMI) Q1 report — and also provided a glimpse of Global Connect activations at KBIS 2026 in Orlando, FL, next February.
Geraldine Morrison, NKBA’s Chief Strategic Partnerships Officer, and Veronika Miller, Managing Director of M2 Consulting and NKBA Global Connect Lead Consultant, introduced the discussion about the current state of the North American Kitchen and bath market with Tricia Zach, Director of Research for NKBA, and Sherry Qualls, NKBA Global Connect Consultant.
Research Shows Strong Fundamentals
Qualls and Zach discussed the KBMO macroeconomic view of the industry for the year, and the KBMI microeconomic “real time” view of the current health, near-term expectations and current major industry concerns through the eyes of NKBA members in four categories: designers, manufacturers, builders, and retailers.
The KBMO analyzes trends in single- and multifamily homes, new construction as well as remodeling, while KBMI focuses on single-family residential projects in mid- to upper-income households.
For 2025, Zach explained that NKBA revised the models it had been using to better reflect the evolving nature of the residential industry, adding two substantial new categories: rental projects and “fix-and-flip” investor properties. Including this data, the overall 2025 forecast for the K&B industry is $235 billion — a significant increase from the $175 billion projected for 2024 — but representing growth of 0.8 percent. When using the revised model to recalculate expectations for 2024, the market for last year rises to $233 billion, in line with the actual projected growth. Part of the spike includes the new end-markets and part of it reflects the increased cost of materials. The market has been fairly steady, which is a tribute to the industry’s resiliency.
More good news, Zach noted, is that this uptick follows two years of contraction. “In 2023, the industry was off 2.3 percent, and in 2024, it was off by 1.6 percent,” she said. “Forecasted growth of 0.8 percent, while not a big number, shows that the industry is fundamentally strong and that there’s pent-up demand. Many people have been sitting on the sidelines to see where the economy is headed before committing to a huge investment.”
Drilling deeper into the outlook, Zach explained that of the $235 billion forecasted, $125.2 billion is expected for remodeling projects, reflecting a 2.6 percent increase, while new construction is projected to slip by 1.1 percent to $109.7 billion. “Construction is countercyclical to remodeling,” she said. “When one is slowing, the other tends to rise.”
Remodeling is strong owing to several factors:
- In the U.S., the low inventory of homes for sale and the overall housing shortage — by 3.4 million units — are pushing home prices higher. Home prices are up by 54 percent since 2019, before the pandemic, making it more difficult to buy.
- Mortgage rates remain high, hovering around 6.8 percent for a 30-year fixed rate. Some 73 percent of homeowners with mortgages have rates below 5 percent, meaning it’s cheaper to stay and renovate than to move and take on greater debt.
- Home equity levels are high, with the average American homeowner holding $406,000 in equity. Historically, when people have this much home equity, they tend to invest in their homes.
Remodeling is the sweet spot for manufacturers considering product placement in this market, particularly international brands, said Qualls. “We’re seeing declining mobility in the U.S., 7.8 percent vs. 10 percent just five years ago,” she noted. “The average time spent in a home is 16 years. Homes are also aging: 23 million homes will be between 20 and 39 years old in 2025, which are the prime remodeling years. All these numbers drive renovation.”
Other Key Data Points
- Of the $77.8 billion (3.3 percent growth) projected for homeowner remodeling, $61.9 billion is expected for professional jobs, up 4.1 percent, compared to $15.9 billion for do-it-yourself projects, up just 0.5 percent. This signals that reaching professional designers and remodelers will result in greater growth in the market, as these pros tend to service generally higher-income households.
- On average, kitchens take 24 percent of the budget for investor/fix-and-flip properties and baths account for about 10 percent.
- On average, mid-size kitchens (up to 35 square meters, or almost 400 square feet) cost about $70,000 while larger kitchens cost $135,000 or more. Primary bath renovations cost about $60,000 on average.
KBMI Reveals Primary Concerns
Turning to the Q1 KBMI, Qualls said the Q1 rating was 55 out of 100, which, while slightly down from Q4 2024, is still healthy and indicates industry expansion. (Ratings below 50 signal contraction.)
Zach said tariffs/trade issues top the list of current concerns among industry pros, leading the way at 7.7 percent (on a scale of 1 to 10.) This is followed by cost of materials at 7.6 percent, inflation fears at 7.2 percent, and fear of recession at 7.1 percent. In most previous surveys, the shortage of skilled labor topped the list of worries, but that has fallen to 5th place, considering current economic uncertainties.
Tariffs are drawing the most concern because most building products already faced higher average tariffs than other imported products, 3.2 percent compared to 2.3 percent. “Approximately 20 to 30 percent of all building products are already being imported, so any tariff increase is going to further elevate those costs,” she reported. “Appliances, hardware and plumbing fixtures are the most at-risk categories.”
Fear of recession and inflation concerns also create uncertainty. And while the availability of skilled labor doesn’t top the list of concerns, it’s still a factor that will disrupt new construction and remodeling. Undocumented workers make up a significant percentage of the construction workforce — up to 38 percent in some categories, like drywall installation — and stricter immigration policies are likely to impact the industry greatly.
Qualls noted that membership in the Global Connect program includes access to all the exclusive research that NKBA conducts, including economic studies, design trends, category research, and more.
Morrison and Miller detailed membership options and benefits of the NKBA Global Connect business development program, now in its eight year, and reviewed KBIS 2025 activations, including the International Delegation program, International Media Tour, Global Connect Lounge with educational programming and panel discussions, and the International Pavilions from the UK, Italy, Germany and Spain. Similar programming and activations will be in play for KBIS 2026, set for Feb. 17 to 19 in Orlando. NKBA Global Connect members get discounts to attend KBIS, marketing and strategic business development advice and more as they explore or strengthen their foothold in the North American market. Click here for more information on NKBA Global Connect.
Watch full webinar below:
