Near-term Challenges, Long-term Growth

Despite shaky economic conditions, window and door companies expect volume and revenue growth in 2025, according to Chris Beard, vice president of building products research at John Burns Research and Consulting, in a March 20 Thirsty Thursday webinar from the National Glass Assoc. Drawing on larger economic reports and the results of the latest Window & Door Market Survey—an exclusive partnership between Window + Door and JBREC—Beard broke down what the market can expect in the coming months. 

Macroeconomic landscape 

Housing is off to a slow start this year. Tariff policies have many homebuyers on the sidelines in a “wait-and-see” approach as uncertainty around costs grows. Political uncertainty clouds the economy and consumer sentiment is declining in households both over and under the $100,000 income mark. “Consumer spending in January had its largest monthly drop in around four years … home improvement expenditures were down 2.7%,” reported Beard. 

Recent employment data shows a robust labor market, but it is worth noting that the numbers do not yet reflect the recent federal government layoffs. Beard also noted that consumer worries about job losses are at levels normally seen during recessions.  

Building materials 

JBREC’s Building Products Dealer Survey showed a sharp decline in orders in February. In fact, dealers reported year-over-year declines in all products categories for the first time in the survey’s history. Windows and doors were at -4%, faring slightly better than the total building materials decline of -8%. 

Dealer customers reporting “strong” demand also fell across nearly all consumer categories. Building materials dealers cite tariffs and labor as top concerns while homebuilders say unsold inventory and land are among their top concerns. Dealers also anticipate prices to increase an average of 6.6% across all product categories for full-year 2025; windows and doors expect a 5% increase. 

New construction 

Beard estimates JBREC captures about 20% of new home sales in the United States each month. Based on this data, “builders continue to register new home sales slightly higher than what we call more normal pre-COVID years from 2012 to 2019,” he says. 

Data also shows 496,000 unsold single-family homes in various stages of construction. “The gap between unsold single-family homes under construction and completed remains large,” Beard says. “Completed homes represent 24% of total inventory.” Build to rent is also growing, representing nearly 10% of single-family starts—more than double the rate from 2022. 

The U.S. needs 1.2 million additional vacant homes to return to balance, which is about 500,000 for sale and 710,000 for rent. Beard notes, however, the 1.2 million figure is conservative and doesn’t account for pent-up demand or affordability challenges. JBREC projects the U.S. needs 1.3 to 1.56 million new homes (for sale and rent) built per year through 2034, depending on immigration.  

Repair and remodeling 

Nearly three-quarters (73%) of outstanding mortgages are at fixed rates below 5%. As such, a record-high 86 million U.S. homeowners stayed in place in 2024. Remodelers report customers are requesting a cost analysis of a major remodel versus buying something new, according to JBREC’s remodeling survey in partnership with Qualified Remodeler. About 56% of professional remodelers report normal or above-normal inquiry levels, which are leading to backlog growth. Still, affluent households drive the lion’s share of remodeling projects.  

Window and door insights 

Beard shares four takeaways from the latest Window & Door Market Survey. 

1 | Shipments and revenue are higher, but lower in first quarter 2025 forecasts 

A full 55% of window and door companies reported volumes growing in the fourth quarter of 2024; average volumes across all companies grew 2.2% year over year. Beard notes the important context for these figures: the industry was still working through backlogs into the first quarter of 2023 so volumes being down in this past first quarter is not a surprise. 

Likewise, 55% of companies report year-over-year revenue increasing in the fourth quarter of 2024; average revenue across all companies increased 3.7% year over year. These results came in ahead of expectations. “After a soft 2023, manufacturers are expecting revenue growth for full-year 2024,” says Beard. “We think this is primarily related to price and not necessarily significant volume increases.” The survey says 73% of companies plan to raise prices in 2025 by an average of 3.6%. 

2 | Accelerating material and labor inflation 

Companies also report accelerating year-over-year inflation in material input costs (6%) and direct labor costs (6%). Nearly 70% of manufacturers report no extended material lead times, translating into improved cycle times.  

3 | Customer-centric approaches drive demand 

Window and door companies continue to find ways to be more efficient, including automation. They also focus on design and re-establishing a value proposition to focus on customer needs and desires. 

4 | Diminished 2025 expectations 

Companies noted a better-than-expected fourth quarter and have solid expectations for the first quarter of 2025. Full-year forecasts are optimistic, but lower than the previous reading. 

Beard concludes near-term challenges remain for new construction and renovation and remodeling from macro uncertainty and changing policy. Expect a turnaround in R&R later this year, with stronger long-term growth fundamentals. 

More of the Window & Door Market Survey 

 

Watch the latest presentation  Participate in the next survey