Kitchen & Bath Business January/February 2025 - 41

President Trump has mentioned a 25% tariff on all goods
coming into the U.S., which could mean even higher prices on
residential building and remodeling materials, 7% of which are
imported from three top sources: Canada, China and Mexico.
" If that 25% is levied on top of the existing 14% effective
ED BRADY
President & CEO of the
Home Builders Institute
Photo credit: HBI
duty rate, we are looking at almost a 40% combined tariff rate
on Canadian softwood lumber, " said Dietz. " Builders should be
looking for alternative sources and ensuring their supply chains
are in good shape. "
According to Darcy, many experts believe that tariffs and
changes to immigration policy, among other issues, could further
increase the cost of kitchen and bath materials and labor.
Generation Prominence
According to Dietz, Gen X members constitute most of the new
construction homebuyers because they are at the peak of their
earning years, and they have already owned at least one home. In
terms of growth in owners remodeling current homes or purchasing
their first home, look to the largest generation: millennials.
" Millennials are entering a sweet spot for remodeling and helping
lift demand for new homes, " said Darcy. " These homeowners
are moving into a phase of life where they more fully establish
themselves as property owners and/or begin to have more capacity
to finance discretionary upgrades. While Boomers and
Gen X will still contribute to the industry's overall growth, their
average spending on renovations will be lower. "
According to David Euscher, chair of the National Board of
Directors for the American Society of Interior Designers, younger
generations like Gen Z have barriers to owning.
" Even though Gen Z is good at saving their money, many are
" rent burdened " and have less available for a down payment or
mortgage, " said Euscher. " Renting is still the more affordable
option in many markets, which keeps renters in their apartments
and contributes to the overall housing shortage, driving up rental
and ownership costs. "
For some young professional couples and young families
buying their first home, they are choosing older neighborhoods
where they can get a better value on a property they can fix up.
An Unsettled Skilled Labor Issue
The federal government estimates about 300,000 unfilled jobs
in the construction industry, which Darcy says translates to
employment prospects across the board in the kitchen and bath
industry. Ed Brady, president and CEO of the Home Builders Institute,
says 70% of those empty jobs are skilled labor positions.
Although there are not as many people retiring out of the industry,
there are still more leaving it than coming in.
BILL DARCY
Global President & CEO
of the National Kitchen
& Bath Association
Photo credit: NKBA
" Potential first-time
homebuyers are
tentative, and many
are priced out of
the market since
interest rates have
not come down. "
" Interestingly, new
single-family homes
being built today are
smaller than they
have been at any time
since 2011. This will
likely support - and
contribute to - the
growing trend of
homeowners opting
to stay in place as
they get older. "
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