A Tight Housing Market and Inflation Are Holding Back the Remodeling Business

Investopedia11-20 04:57

Key Takeaways Lowe's said it's seeing less demand for expensive DIY home projects.In response, executives said, the retailer is trying to attract professional home contractors and get others excited ...

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Fewer people are looking to market a home or make it their own: Housing turnover is near a 30-year low, Ellison said, while Americans are still feeling squeezed by high interest rates and inflation.In response, executives said, Lowe’s Cos.  has been trying to focus its core customer on less expensive projects like painting, and generate excitement with a rewards program. 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Fewer people are looking to market a home or make it their own: Housing turnover is near a 30-year low, Ellison said, while Americans are still feeling squeezed by high interest rates and inflation.\n\n\n \"Continued underlying pressure in big-ticket discretionary—so, categories like kitchen and bath, flooring and décor—[we] really continue to just see that tied to the macro,\" CFO Brandon Sink said, according to a transcript of the call made available by AlphaSense.\n\n\n In response, executives said, Lowe’s Cos. (LOW) has been trying to focus its core customer on less expensive projects like painting, and generate excitement with a rewards program. The retailer is also trying to serve more home contractors, they said.\n\n\n Still, it's hard to make up for the loss in DIY dollars. Fewer big-ticket projects contributed to a 1.1% decrease in third-quarter comparable store-sales from a year earlier, Lowe's said.\n\n\n A renovation slump is also hitting Home Depot (HD). The number of transactions above $1,000 declined 6.8% year-over-year as fewer people undertook the kinds of projects that require financing, Home Depot said on an earnings call last week. \n\n\n Surveyed consumers said they were holding off on remodeling due to “general macroeconomic and even political uncertainty,” Home Depot CEO Edward Decker said, according to a transcript from AlphaSense.\n\n\n Trends will turn in Lowe’s favor at some point, its CEO said: Americans are living in older homes, with appreciating values, Ellison said, and as interest rates come down, people will tap their home equity to finance upgrades and repairs.\n\n\n “We don't know when the inflection happens, but when it happens, we've been building our playbook to be prepared,” he said.\n\nDo you have a news tip for Investopedia reporters? Please email us at\ntips@investopedia.com","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2484053909"}