'Return to Growth' Forecast for 2026

Market stabilization coupled with modest growth are among the leading predictions for the nation’s housing, remodeling and kitchen/bath markets in 2026, according to the latest market forecasts. Among the key statistics and forecasts released in recent weeks by government agencies, research firms and industry-related trade associations were the following:

KITCHEN & BATH MARKET INDEX

A growing body of evidence points to “stabilization and an expected gradual return to growth” for the kitchen and bath industry in 2026, following three years of contraction, the National Kitchen & Bath Association reported, noting that one in four surveyed kitchen and bath firms “now say that they’re no longer being held back from growing – even though rising input costs from tariffs continue to significantly impact margins.” NKBA’s 2026 Kitchen & Bath Market Outlook report, released in February, projects that U.S. kitchen and bath revenue will grow 0.1%, to $228 billion, in 2026, with momentum picking up in the second half of the year. An increased share of spending will come from existing-home renovations, the NKBA said. While consumer uncertainty, tariffs/trade issues and rising building material costs continue to top the list of growth constraints, fewer survey respondents reported these factors were holding them back, the NKBA said. The impact of tariffs on building product prices, in particular, is being reduced through diversifying and reshoring supply chains, along with waivers for many product categories, the association noted. “While affordability challenges haven’t gone away, we expect to see more consumers move forward with projects, as borrowing rates and product prices hopefully begin to ease,” said NKBA Global President & CEO Bill Darcy. “Factors like the skilled-labor shortage and high labor costs will continue to hold some kitchen and bath companies from realizing the market’s full potential, but overall, there are positive signs about the year ahead.”

RESIDENTIAL REMODELING

Construction and design businesses are heading into the balance of 2026 with a “measured but resilient outlook,” according to the Q1 2026 U.S. Houzz Pro Industry Barometer, a quarterly gauge of business conditions across the residential remodeling and new-construction markets. “While expectations for the broader national economy remain subdued, and cost and labor pressures persist, many firms anticipate stable demand for their projects,” said Houzz, the Palo Alto, CA-based online platform for residential construction and design. To drive revenue growth in 2026, construction and remodeling businesses are honing their strategies by prioritizing larger and higher-value projects, increasing prices and profit margins, and improving employee productivity through the use of AI and other high-tech tools, Houzz observed.

CABINET & VANITY SALES

Sales of kitchen cabinets and bathroom vanities declined in 2025 compared to the same 12-month period a year earlier, the Kitchen Cabinet Manufacturers Association reported. According to the KCMA’s latest monthly “Trend of Business Survey,” released in February, participating manufacturers reported that overall cabinet and vanity sales in 2025 fell 6.5% from the sales posted from January through December of 2024. Full-year declines were reported for stock cabinets (-12.4%), as well as for semi-custom (-5.7%) and custom units (-4.4%), the Reston, VA-based KCMA reported.