Building Products

Building Material Price Stability

Eric Finnigan photo

Eric Finnigan

September 9, 2022

While housing starts have been steadily declining since February, our recent survey of more than 500 remodelers shows a slight remodeling decline ahead too. This means that building material demand will almost certainly decline next year at the same time that supply is finally catching up to demand, resulting in:

  • Building material price stabilization

  • Labor availability among trades that work in both the new home and remodeling industries

This early remodeling indicator is very recent, as both Lowe’s and Home Depot reported strong remodeling growth in Q2:

Here are comments from some of the many remodelers whose large backlogs are starting to thin out.

  • ‚ÄúA customer who pre-qualified to finance a $160K kitchen project at a lower rate early in the year was turned down when interest rates rose.‚ÄĚ

  • ‚ÄúOur company relies on clients doing HELOCs [home equity lines of credit]. This has dried up!‚ÄĚ

  • ‚ÄúLead volume is decreasing as clients are finding it harder to finance via home equity.‚ÄĚ

  • ‚ÄúSome customers who had planned on financing or refinancing their homes to pay for jobs, are delaying until they can either save up cash or wait for interest rates to lower.‚ÄĚ

  • ‚ÄúCash-out refinances or HELOCs to fund projects have taken a significant hit.‚ÄĚ

Building materials dealers aren’t likely to experience the impact soon, due to the tremendous backlog of currently unfinished projects. Also, prices of the products that continue to experience commodity shortages will likely stay high.

Three primary drivers behind the recent growth in remodeling project backlogs have now shifted:

  • 1.¬†Return to normal demand:¬†33% of building materials dealers rated remodeling company traffic Strong in July, down from 61% in February, as new remodeling project commitments slowed.
  • 2.¬†Stabilizing project scope:¬†53% of remodelers now report that project sizes are no longer increasing in size and scope.
  • 3.¬†Improved product availability: 60% of remodelers reports that lead times are improving.

And we also remain very bullish on long-term remodeling demand, due to the number of homes entering the prime remodel years, all-time high levels of home equity, and homeowners deciding to upgrade their current home instead buying new.

Would you like real-time insights on the slowdown in residential remodeling?

Our latest US Remodeler Index Report is available to download for free!

Our US Remodeler Index (USRI) is delivered quarterly exclusively to our clients who subscribe to our research. For this quarter only, we are offering it for free to all that have access to this form. Enter your information below to download the full report.

This quarterly index is the result of a unique partnership between one of the industry’s leading authorities on professional remodeling trends, Qualified Remodeler, and John Burns Real Estate Consulting.
 The USRI benchmarks current industry growth, near-term project demand and is an independent, frontline view into market trends, shifts, constraints, and underlying drivers of professional home repairs and remodels. The USRI is derived from surveys of presidents, owners, and managers of hundreds of remodeling firms in all 50 US states.

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About The Author

Eric Finnigan photo
Eric Finnigan
Vice President of Demographics Research
Eric co-leads demographics research at JBREC, helping clients understand how trends in population, households, and migration impact housing demand. He also oversees the US Remodeler Index, a quarterly survey covering the residential remodeling industry.

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Products and Services Mentioned

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Building Products Consulting

Our building products team is comprised of industry experts with diverse sector and functional experience. We partner across organizations to provide custom consulting reports to aid organic and inorganic investment decisions, strategic planning, and marketing.
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US Remodeler Index Survey

Created in collaboration with Qualified Remodeler magazine, the US Remodeler Index measures remodeler sentiment for current activities, future or near-term activities, as well as consumer demand or ‚Äėhotness.‚Äô
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Burns Building Product Industry Analysis and Forecast

A report that offers actionable analysis and accurate forecasts for building product sector trends, including industry drivers for both residential repair and remodeling spending and new home construction activity.

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