3 Keys to Residential Housing and Remodeling in 2018

  • Categories:

    Industry Trends, Marketing Insights

  • Date:

    March 06, 2018

3 Keys to Residential Housing and Remodeling in 2018

Industry Trends, Marketing Insights

The residential housing and remodeling markets grew in 2017, and 2018 projections foretell another positive year. In fact, housing starts are expected to swell by 9 percent (up from 2 percent in 2017), including nearly 1 million new single-family residences. Meanwhile, current homeowners continue to invest in home improvement, from lawn and garden projects to kitchen makeovers. 

But which economic and cultural factors will have the most influence on the housing and remodeling markets in 2018 and beyond, and who’s steering the ship? How can you make sense of the numbers and plan for your own success?

Here are a few highlights from our annual snapshot of residential housing and remodeling industry indicators. Click below for a free download of the full infographic.

Residential housing and remodeling will build on momentum from 2017.

Consistency is the name of the game here. With 1,310,000 housing starts projected for 2018, builders are still riding the wave. And, the wave isn’t limited to new residential construction. Even homeowners who are unable to or choose not to move are taking on more remodeling projects, whether they’re completing the work or hiring a contractor.

What’s fueling this growth? I like to start by looking at the macroeconomics. Consider: unemployment rates remain low, and real income growth is on the rise. Consumer confidence is strong, with no real signs of weakening in the near future. And, as people become more confident, they also become more likely to purchase a new home or invest in the one they already have. Finally, household formation rates are still posting healthy numbers.

If you’re in the housing or remodeling business, it’s all good news — but take it with a grain of salt. Remember, these numbers could shift in the future, especially as labor shortages and rising material costs amp up the pressure on builders. In addition, millennials, one of the keys to all of this growth, still face some headwinds, from high student loans to scarce inventory of entry-level or affordable homes. Finally, still-low interest rates won’t stay that way forever, perhaps delaying more would-be homebuyers who aren’t ready to sign on the dotted line today.

One more thing to note here: the multi-family segment that’s been red-hot for nearly a decade following the housing crisis is finally losing steam as market forces stabilize. Most experts expected this swing, and now it’s coming to bear.

Everyone — from millennial first-time homebuyers to established boomers — will buy more home improvement products this year.

If you’re a home improvement product manufacturer or retailer, 2018 is a great time to be in business. According to the Home Improvement Research Institute, sales will climb to $382 billion this year. Consumers of all ages are getting into the game: millennials, Gen Xers and baby boomers are all buying more products, from windows to paint.  

Homeowners ages 45-plus are leading the remodeling charge.  

Millennials, many of them first-time homeowners, are doing more DIY projects and more home improvement in general. But quantity isn’t everything. Starting at age 45, homeowners tend to have more disposable income for larger, more expensive projects, like kitchen remodels and even home additions. So, while millennials may be the most active of the bunch, their big brothers and sisters, parents and grandparents are still spending more money to improve their homes. 

If you’re a marketer in the home and building industry, it’s important to stay focused.

Industry indicators, especially the positive ones, can make us all want to jump to conclusions. But even top industry experts and forecasters don’t know exactly when, where or how the next shift will occur.

To a certain extent, you can future-proof your business by looking beyond the big picture to examine underlying trends that may impact it. For example, smart home technology is on the move, with the number of smart homes projected to increase more than twofold by 2022. Maybe energy efficiency is your sweet spot. Can you capitalize on homeowners’ growing desire to save money and help the environment? Or, perhaps you can benefit from the current high demand for entry-level homes. No matter what, listen to what consumers are asking for and determine where your business can meet those needs. 

Above all, remember — while it’s crucial to know and consider the big picture, focusing on your own business and customers is the most important thing you can do. 

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