The
nation’s
chronically
aging
housing
stock,
together
with
a
lingering
lock-in
effect
and
a
growing
share
of
older
homeowners
who
prefer
to
stay
put,
amounts
to
a
trifecta
for
long-term
remodeling
and
renovation
growth
expectations.

In
the
near-
and
midterm,
however,
the
industry
continues
to
grapple
with
economic
uncertainty
and
an
intensifying
pervasive
labor
capacity
constraint.

At
the
International
Builders’
Show
(IBS)
this
week,
builders
struck
notes
of

cautious
optimism.

In
an
interview
with

The
Builder’s
Daily,

National
Kitchen
&
Bath
Association
(NKBA)
President
&
CEO
Bill
Darcy
said
remodelers
feel
even
more
confident
than
their
homebuilding
counterparts,
as
NKBA
sees
remodeling’s
key
drivers
outpacing
new
residential
construction.  

At
IBS,

National
Association
of
Home
Builders
(NAHB)
Economist
Eric
Lynch
noted
that
the
average
age
of
a
home
increased
from
31
years
in
2006
to
41
years
in
2023,
which
would
logically
lead
more
owners
to
pursue
home
improvement
projects.
Homeowners
have
also
built
more
home
equity
after
the
post-pandemic
boom
in
home
prices,
giving
them
greater
financial
wherewithal
to
undertake
these
projects.

The
lion’s
share
of
growth
in
the
remodeling
industry
comes
from
higher-end
households.
Wealthier
Americans
are
increasingly
fueling
spending
growth
in
the
American
“K-shaped”
economy,
and
remodeling
is
no
exception. 

Exhibitors
at
the
Kitchen
&
Bath
Industry
Show,
co-located
this
week
with
IBS,
took
note
of
this
trend.
According
to
Darcy,
many
of
the
manufacturers
at
the
show
marketed
luxury
items,
hoping
to
tap
into
this
lucrative
segment. 

“Yes,
it’s
a
sliver
of
the
top,
but
there’s
a
lot
of
money
there,
and
[those
upscale
households]
are
not
really
being
impacted
by
cost.
I
think
this
could
further
influence
optimism,
because
the
luxury
sector
could
continue
to
grow
and
expand
there.
So
we
don’t
see
anything
slowing
down
on
the
luxury
[front],
and
it’s
definitely
having
a
big
positive
influence,”
Darcy
said. 

While
Darcy
sees
the
upper
end
of
the
remodeling
market
as
driving
most
of
the
growth,
he
pointed
to
the
“missing
middle”
of
homeowners
who
are
delaying
projects
as
a
trend
holding
the
industry
back
from
full
recovery.
However,
there
is
some
pent-up
demand
in
this
segment
that
could
soon
unlock
itself,
Darcy
said. 

“There’s
still
this
consumer
uncertainty.
They
need
to
see
consistent
stability.
We
see
more
normalizing
in
the
second
half
of
the
year,”
he
explained. 

The
persistent
labor
shortage                  

Darcy
said
the
labor
capacity
shortage
in
remodeling
and
residential
construction
has
ranked
as
the
remodeling
and
renovation
industry’s
No.
1
business
risk
for
a
long
time.
To
combat
this
shortage,
NKBA
partnered
with
the
NAHB’s

National
Housing
Endowment
to
provide
construction
career
grants.
They
also
partner
with
middle
and
high
schools
and
vocational
schools
to
recruit
more
young
people
into
the
trades.

“The
real
big
problem
is,
it’s
very
hard
to
penetrate
the
school
systems
with
their
priorities
that
they
have.
They
have
little
time
and
too
many
other
things
going
on,”
Darcy
said. 

Darcy
also
pointed
to
a
persistent
perception
problem,
despite
the
availability
of
fulfilling,
well-paying
careers
in
the
construction
industry.
To
combat
these
misconceptions,
Darcy
says
that
the
industry
needs
more
ambassadors,
such
as
Mike
Rowe
of

Dirty
Jobs,
who
can
better
market
the
industry
to
the
youth. 

However,
this
could
prove
challenging,
especially
considering
the
makeup
of
the
residential
construction
workforce.
According
to

data
from
the

Home
Builders
Institute,
immigrants
accounted
for
25.5%
of
the
residential
construction
workforce
in
2025,
a
new
high.
However,
the
nation’s
immigrant
population

fell
last
year,
shrinking
the
pool
of
immigrant
labor
in
many
markets. 

Additionally,
over
90%
of
construction
workers
are
men,
but
the
male
labor
force
participation
rate
continues
to
fall.
In
2000,
the

male
labor
force
participation
rate
was
about
75%.
It’s
steadily
declined
since
then
and
is
now
around
67%.
With
more
men
opting
out
of
the
workforce
and
stricter
immigration
policies
in
place,
residential
construction
will
need
to
recruit
more
young
people
and
women
to
fill
the
gap. 

Closing
the
skilled
labor
shortage
gap
is
crucial,
according
to
Darcy.
The
labor
shortage
is
already
a
major
issue,
but
once
pent-up
demand
enters
the
market,
the
shortage
will
likely
become
more
pronounced.
 

“When
the
missing
middle
comes
back,
then
[the
constraint
on
frontline
skilled
labor
capacity]
is
going
to
get
worse,”
Darcy
said.