Boise Cascade sees ‘modest growth’ in 2025 home improvement spending

The company states: “Demand for the products we manufacture, as well as the products we purchase and distribute, is correlated with new residential construction, residential repair-and-remodeling activity, and light commercial construction. Residential construction, particularly new single-family construction, is the key demand driver for the products we manufacture and distribute. As reported by the U.S. Census Bureau, housing starts were 1.42 million in 2023. Current industry forecasts for U.S. housing starts are approximately 1.35 million in 2024 followed by 2025 starts at or modestly above 1.40 million. For the nine months ended September 2024, single-family starts are outpacing 2023 levels by 10% whereas multi-family starts have declined sharply from historic levels due to increased capital costs for developers, combined with historic levels of multi-family unit completions in 2024. Home affordability remains a challenge for many consumers due to home prices and the cost of financing, with the level of mortgage rates also limiting the supply of existing housing stock available for sale. Large homebuilders are addressing affordability challenges by reducing home sizes and plan complexity, as well as offering mortgage rate buydowns. New residential construction will continue to be an important source of supply for the demand created by undersupplied housing, favorable demographic trends, and low unemployment. We expect 2025 to reflect modest growth in home improvement spending, as the age of U.S. housing stock and elevated levels of homeowner equity will continue to provide a favorable backdrop for repair-and-remodel spending. Ultimately, macroeconomic factors, the level and expectations for mortgage rates, home affordability, home equity levels, home size, and other factors will influence the near-term demand environment for the products we manufacture and distribute.”