What Should We Expect For Remodeling Activity Going Into 2023?
What does the Leading Indicator of Remodeling Activity tell home remodeling franchise owners to expect for demand for the rest of 2022 going into 2023?
With 2022 halfway over, we’re looking ahead to plan for 2023. If you own a cabinetry business or home remodeling business, it’s important to try to anticipate demand for the immediate future. The home remodeling and renovation industry enjoyed a sizable surge in the middle of 2020 that has largely continued until now. Just how and when this demand will taper off is a key question for those in the industry.
One of the most reliable industry sources on such matters is the Leading Indicator of Remodeling Activity, or LIRA. This is a report published by the Joint Center for Housing Studies at Harvard University. The report looks at trends in national home improvement and repair spending to owner-occupied homes.
The Joint Center for Housing Studies published the most recent LIRA in July and it predicted the recent gains in demand for remodeling to slow through to the middle of 2023, however still be higher than average from previous years. This is not a wholly unexpected development; huge sudden growth is never sustainable indefinitely. However, some factors cited in the LIRA are worth noting.
During the pandemic, the combination of more spare time, low-interest rates, fewer big-ticket items on which families could spend their money, and people being stuck at home caused a spike in demand for home remodels. In March 2020, few people could have predicted the huge demand for home remodelers by the summer. This goes to show how markets can change in unpredictable ways.
Unfortunately, we’re now dealing with inflation. This was predictable, but other factors, such as the Russian invasion of Ukraine, were wildcards that have affected the global economy significantly. With interest rates now higher and the possibility of a recession, families will be less keen on borrowing money for kitchen or bathroom remodeling. However, housing prices are likely to remain high, so the impetus to spruce up homes, rather than buy new ones, will remain. Likewise, homeowners still have significant collateral to take out loans for a remodel should they want to do so.
The ups and downs of the market only further prove that working with an experienced, respected, and successful franchise is key. At Kitchen Solvers, we offer solutions for those looking to do a full remodel or for those who are looking to save money with cabinet refacing. Having a wide array of services allows us to stay nimble in the ever-changing market. The truth of the matter is, kitchens are not going away and people will always need them serviced and upwe are always looking for opportunities to work with qualified candidates as one of our franchise partners. If you would like to learn more about our remodeling business opportunities, please do not hesitate to get in touch with us.Back