Every quarter, we survey hundreds of professional remodelers to find out what they’re seeing on the ground in real time, with their customers and in their markets.
Why talk to hundreds of pro remodelers every quarter?
Because in the $426 billion repair and remodeling market, it’s the pro remodelers (not the do-it-yourselfers—DIYers) that drive almost all the growth right now. Remodelers report taking on more (and larger) projects.
However, the housing market is changing quickly. So, we asked pro remodelers how they are adapting to the wild market conditions. Then, we sifted through hundreds of responses to highlight the top seven most common responses.
Top 7 Ways Remodelers Are Adapting to Wild Housing Market Conditions:
- Remodelers are raising prices in response to rapid material price inflation, a dire labor shortage, and extremely long backlogs of demand.
- Faced with unprecedented product lead times and unpredictable delays, remodelers are ordering materials earlier, long before work begins.
- Remodelers are becoming logistics and supply chain experts, as large projects require extremely close coordination with vendors, subcontractors, and clients.
- Remodelers are pushing project start dates out later, while they wait for products and materials to arrive on-site.
- As remodelers navigate unexpected delays, many are now filling in scheduling gaps with smaller projects to keep cash flowing.
- We see worrying signs that remodelers are stocking up on materials when prices could be peaking and demand could be slowing, setting the stage for potential deflation in building material prices.
- Lastly, remodelers are putting homeowners on the hook for unexpected price increases by shortening quote windows, adding strict escalation clauses, and rebidding materials before signing agreements.
Based on these responses and our full view of the building products supply chain, we have three primary concerns about the pro remodeling market heading into the second half of 2022.
- Sticker shock: Customers are seeing massive price increases from remodelers, and they are starting to push back. Watch for more projects hitting “pause.”
- Risk to backlogs: Some remodelers are now taking deposits for 2023 projects. However, if home values soften or decline, some of this future demand could vanish.
- Spiking mortgage rates: Rate lock-in and the incredible buildup of housing wealth are longer-term drivers of R&R spending. However, in the short term, rate spikes threaten homeowners’ ability to tap record-high home equity and write large 5- and 6-figure remodeling checks.