Home builders, remodelers, and kitchen/bath professionals are entering 2025 with renewed optimism, even as market headwinds persist from the previous year. Recent forecasts from industry experts, trade associations, and government reports highlight key trends shaping the landscape for housing, remodeling, and home appliances.
Housing Starts & New Home Sales
Builder confidence remains steady despite high home prices and elevated mortgage rates, as optimism grows around potential regulatory improvements. The National Association of Home Builders (NAHB) reports that while high interest rates, rising construction costs, and limited buildable land remain challenges, many builders anticipate relief in the regulatory environment.
“The Federal Reserve is expected to implement further interest rate cuts in 2025, though our projection has adjusted from 100 basis points to 75 basis points due to ongoing inflation concerns,” said NAHB Chairman Carl Harris. Meanwhile, NAHB Chief Economist Robert Dietz predicts that long-term interest rates will remain near current levels, with mortgage rates staying above 6%. Single-family housing starts are projected to see only a slight increase in 2025.
Residential Remodeling
Following two years of decline, spending on home improvements and maintenance is set to rebound modestly in 2025. According to Harvard University’s Joint Center for Housing Studies, the Leading Indicator of Remodeling Activity (LIRA) projects a 1.2% year-over-year increase in home renovation and repair expenditures.
“A strong labor market, rising home values, and improved home sales activity are driving increased remodeling investment,” said Carlos Martín, director of the Remodeling Futures Program. The market’s estimated size has been revised upward by $30 billion, reaching $509 billion in 2025.
Major Home Appliance Shipments
The home appliance industry showed signs of recovery in 2024, with domestic shipments of major appliances rising 2.6% from the previous year, according to the Association of Home Appliance Manufacturers (AHAM). The industry saw notable growth in refrigeration (+3.7%) and laundry appliances (+2.2%), while shipments for kitchen cleanup and cooking appliances dipped by 2.1%.
Housing Market Outlook: Supply Constraints Easing
The housing inventory shortage appears to be easing, offering hope for increased home sales in 2025. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), forecasts that after two years of sluggish activity, existing-home sales will rise to 4.47 million in 2025 and exceed 5 million by 2026.
“With mortgage rates stabilizing near 6% and a steady job market, buyers are adjusting their expectations and taking advantage of increased inventory,” Yun noted. He anticipates a slower growth rate in home prices as more supply enters the market, making homeownership more accessible.
The Bottom Line
Despite ongoing challenges, the housing and remodeling sectors are showing resilience as 2025 begins. With improving market conditions, stabilizing mortgage rates, and a promising outlook for remodeling and home sales, industry professionals remain cautiously optimistic for the year ahead. Stay tuned!
