State of the Market

After a year of ramped up deal activity in the window and door industry, including two marquee acquisitions to begin the year—PGT Innovations (Miter Brands) and Masonite (Owens Corning)—buyer appetite remains strong with mergers and acquisitions activity expected to continue to accelerate in 2025. 

Today, both strategic participants and private equity firms are actively pursuing new opportunities with the expectation of strong earnings growth pushing them to pay healthy multiples for high quality assets. 

Building products M&A activity in the United States picked up meaningfully in 2024, with an over 30% increase in year-over-year deal volume. The heightened activity underscores the ongoing optimism in the sector, where both established industry players and investors are looking to enter the market at what they believe to be the start of a multi-year growth outlook. As we moved into the second half of the year, notable deals continued to take form. Window Nation, one of the largest window replacement companies in the U.S., announced in September 2024 it had acquired Florida-based Armorvue Window and Door. Pella Corp. completed the successful divestment of its two luxury businesses—Duratherm Window Company and Michael Reilly Design—in July 2024. 

Promising outlook 

The tides in the housing market haven’t turned quite yet. Housing starts have remained stubbornly flat, existing home sales reached their lowest levels since October 2010 and mortgage rates are still above 6.5%. However, M&A activity in the window and door industry is not fueled by immediate market fundamentals, but by a promising long-term outlook for the U.S. housing market. 

“After several years of frenzied activity during the pandemic, owners are now making upgrades and repairs to their homes at a steadier and more sustainable pace,” says Carlos Martin, director of the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. 

A steady recovery in new home construction and existing home sales in 2025 will drive growth across both the new construction and repair and renovation markets. 

Investors are seeing a runway for growth in 2025, driven primarily by: 

• Concerted efforts to improve housing affordability, including administrative support to slash costly regulations and permit requirements that drive up home prices. 
• Interest rate cuts and easing inflation continuing to put downward pressure on mortgage rates. 
• An increase in historically low existing home sales releasing the pent-up demand in the repair and renovation market. Existing home sales are a key driver of repair and renovation activity as homeowners typically renovate homes prior to selling and right after moving in. 
• The “lock-in” effect, whereby current homeowners with below market interest rates are disincentivized to move, easing and leading to higher turnover of existing homes as well as increased new home construction. 
• Large stock of homes built during the housing boom that preceded the Great Recession coming into their prime remodeling age. 

Looking ahead 

We expect accelerated deal activity to continue in 2025 and outpace 2024 as investors are looking to buy high-quality assets before the market gets too crowded. High-quality assets today are receiving a scarcity value premium; however, if deal activity picks up to levels seen in 2021 and early 2022, this premium is expected to wane. That being said, we remain confident in a multi-year growth outlook in the housing market and believe many companies in the industry are well positioned to experience a long runway of earnings growth. 

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