The North America residential water heater market is set to grow substantially by 2027 owing to the expanding real estate sector in the United States. In addition, prevalent demand for energy efficient water heating solutions across the region is expected to further promote market growth over the forecast timeline.

Following the COVID-19 outbreak, government-imposed lockdown restrictions across the region encouraged homeowners to invest in the maintenance of their current dwellings, which has boosted product demand. Moreover, the pandemic prompted people to look for residential space in view of the stay-at-home orders. Consequently, the real estate market in the U.S. has prospered during the pandemic, thereby boosting North America residential water heater market adoption.

Notably, industry players have been employing profitable strategies to gain a solid footing in the market, such as product launches, acquisitions, and partnerships, which has influenced industry dynamics positively. For instance, in July 2021, A.O. Smith, a key manufacturer of residential water heaters, announced the acquisition of Master Water Conditioning Corporation, a company specializing in water treatment. The acquisition of Master Water Conditioning Corporation was intended to allow A.O. Smith to expand into the water treatment sector and thus, establish itself as the leading provider of water heating and treating solutions.

In another instance, in May 2021, Whirlpool Corporation, a home appliances leader, announced a capital investment package of USD 15 million towards its factory in Tulsa, Oklahoma, to improve production capabilities for the U.S. market. As a result, growing focus of companies on product development and enhancing their manufacturing capacities has bolstered market growth.

The North America residential water heater market has been segmented based on product, capacity, energy source, and countries. The product segment has further been bifurcated into instant and storage.

The instant product segment is anticipated to progress at a steady pace over 2021-2027. Escalating need for on-demand heating has resulted in more installations in single and multi-home apartments, which is anticipated to foster segmental demand in the forthcoming years. The instant product segment has been divided into gas and electric. The electric instant product segment is expected to see substantial growth on account of rising demand for energy efficient water heater systems, which is expected to bolster electric water heaters uptake across the region through the assessment period.

The storage product segment has been categorized into electric (<30 liters, 30-100 liters, 100-250 liters, 250-400 liters, and >400 liters) and gas (<30 liters, 30-100 liters, 100-250 liters, 250-400 liters, and >400 liters). The 30-100 liters electric storage product segment is projected to witness notable expansion over the analysis period. Mounting demand for hot water has led to increased installations of units of this capacity across small sized houses and apartments, which is slated to support segmental growth in the upcoming years.

The <30 liters gas storage product segment is anticipated to witness stable growth through 2027. Favorable features of these water heaters, such as low emissions and limited installation space, have impelled product uptake in small apartments, which is speculated to drive segmental revenue growth in the future.

On the basis of capacity, the market has been segregated into <30 liters, 30-100 liters, 100-250 liters, 250-400 liters, and >400 liters. The >400 liters capacity segment is estimated to garner a sizable valuation by the end of 2027, registering a solid CAGR over the review period. Soaring product adoption in swimming pools and space heating systems is foreseen to stimulate segmental expansion in the forthcoming years.

With respect to energy source, the North America residential water heater market has been segmented into electric and gas (natural gas and LPG). The natural gas water heaters segment is projected to grow at a CAGR of approximately 7% through the assessment timeframe.