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Building Material Demand Expected to Dip In 2023 as Remodelers Catch Up With Backlogs

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Remodeling

Building Material Demand Expected to Dip In 2023 as Remodelers Catch Up With Backlogs

The remodeling sector reported strong growth in 2022, but as more remodelers catch up with lengthy backlogs, demand for building materials is expected to fall in the year ahead


September 12, 2022
Person remodeling wooden home flooring
Image: Stock.adobe.com

Housing starts have been steadily declining since February, and according to John Burns Real Estate Consulting, that trend will soon spill over into the remodeling sector as well, meaning that building material demand will likely fall even as supply catches up. Large backlogs are beginning to thin out, but remodelers still need to order materials for existing projects, so an upcoming slowdown likely won’t be evident to building material manufacturers until next year.

In the meantime, remodeling projects are stabilizing in size and scope, but overall demand in the remodeling sector remains historically high, especially as a large share of homes enter prime remodel years and homeowners with all-time high levels of home equity decide to upgrade their existing homes rather than buying new.

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

  • “A 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.”
  • “Our company relies on clients doing HELOCs [home equity lines of credit]. This has dried up!”
  • “Lead volume is decreasing as clients are finding it harder to finance via home equity.”
  • “Some 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.”
  • “Cash-out refinances or HELOCs to fund projects have taken a significant hit.”

Read more

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