In the ever-evolving world of home remodeling, staying ahead of the curve is essential. That's why we were thrilled to have Bjorn Freudenthal, New Spaces Home Advisor, as a guest speaker at the recent NARI (National Association of the Remodeling Industry) Sponsorship Kick Off event. Bjorn provided valuable insights into the remodeling industry's current landscape and the exciting prospects on the horizon. Here are a few key points he discussed that we want to share with you.
1. Project Completions on the Rise
Bjorn started by highlighting the positive momentum in the Design Build Segment, with a notable 2% growth in project completions during the second quarter of 2023 compared to the same period in 2022. This growth is a testament to the resilience and adaptability of the industry in the face of challenges.
2. Strong Demand Continues
Despite a projected 3% slowdown by the end of 2023 compared to 2022, the industry remains robust, with a flat year-over-year outlook. This indicates that the demand for remodeling services is still going strong, thanks to the industry's stellar performance in recent years.
3. Exciting Growth Ahead
Looking further into the future, Bjorn shared projections that paint a promising picture. The remodeling market in the United States is expected to experience compounding year-over-year growth rates of 5% to 7% from 2024 to 2026. These figures underscore the industry's potential and the opportunities for businesses like ours to thrive.
4. Influence of Interest Rates
Bjorn touched on the influence of interest rates on consumer confidence. The scenario of 6% to 7% interest rates compared to the previous 3% may seem like a significant increase at first glance. Still, when viewed from a historical perspective, it remains reasonable and manageable, indicating that consumers are still inclined to invest in remodeling projects.
5. Emergence of Partnership Projects
One fascinating trend discussed was the increase in partnership projects, where pro remodelers collaborate with DIY homeowners. This collaborative approach allows for greater creativity and flexibility in remodeling projects and is an area of opportunity for remodelers to explore.
6. Easing Inflation and Supply Chain
Good news on the economic front: building products inflation is cooling off, and supply chains are improving. Lead times for most products are almost back to normal, with the exception of appliances. These improvements mean smoother project planning and execution.
7. Remodeling in Place
Bjorn highlighted the shift towards "remodeling in place" as opposed to moving. Homeowners are opting to improve and personalize their current homes, leading to more extensive and multi-room projects. This trend aligns perfectly with the services we offer, emphasizing the importance of adapting to changing customer preferences.
8. Wealth Transfer and Homeowner Equity
The largest wealth transfer in the United States is currently underway, with baby boomers passing on their wealth to Generation X and millennials. This, coupled with homeowner equity at record levels, presents a significant opportunity for remodeling companies to tap into a market of financially empowered homeowners.
In conclusion, Bjorn Freudenthal's insights at the NARI Sponsorship Kick Off event painted a bright future for the remodeling industry. While challenges and changes persist, the industry's resilience and adaptability continue to drive growth and innovation.
At New Spaces, we're excited to be part of this dynamic landscape, ready to push the boundaries of what's possible in home remodeling.
The future is indeed looking brighter than ever.