Cash-strapped homeowners may soon have no choice but to repair their aging houses

MW Cash-strapped homeowners may soon have no choice but to repair their aging houses

By Bill Peters

Home Depot and Lowe's have struggled this year, but UBS analysts say they're due to benefit as homeowners reach a tipping point with units built during the mid-2000s housing boom

Shares of Home Depot and Lowe's are down so far this year.

Even in a largely frozen housing market, there's reason to believe things could soon get better for home-improvement chains Lowe's and Home Depot.

People can only put off home repairs for so long, UBS analysts said in a recent note. Houses built during the mid-2000s boom are now around 20 years old. Things like appliances, power equipment and outdoor furniture bought during the pandemic are also getting older. That backdrop could set the stage for an extra $1 billion to $2 billion in spending per year, they said.

In other words, older homes still need fixing, whether owners like it or not. And the UBS analysts, led by Michael Lasser, said those trends should help the home-improvement retail sector do a bit better this year than last year, even if the market has doubts about the extent of a rebound.

"Even if this is too optimistic, we think the demand is not evaporating," Lasser said in the research note. "Rather, it is being deferred. This means the longer the downturn persists, the more robust the recovery will be."

"As the market sees evidence of this occurring, the shares of HD and LOW should rally," the analysts said.

Shares of Home Depot $(HD)$ are down around 9% so far this year, and were down around 1.4% on Monday. Similarly, Lowe's $(LOW)$ stock was down 6% so far this year, and had slipped 1.1% during the day.

More details on the state of consumer demand will arrive when Home Depot and Lowe's report quarterly results next week.

Home renovations boomed during the pandemic, as many homeowners were stuck indoors. But as the economy reopened, the Federal Reserve raised interest rates to cool a wave of price increases initially brought about by supply shocks.

Those disruptions, as well as things like tariffs, have pushed the costs of building materials higher. Elevated home prices and interest rates have kept many buyers on the sidelines. Things like higher gas prices are likely to keep consumers cautious.

Still, the UBS analysts said, the repairs many homes need, like leaky roofs, have to be made. They said they expect 0.5% sales growth for the home-improvement retail sector this year, followed by bigger gains of around 3% next year and a return to the long-term growth rate of roughly 4% in 2028.

Whirlpool last week noted heavy pressure on discretionary appliance sales but said that purchases made under "duress" - when equipment broke down - remained relatively steady.

See more: Americans are behaving like they're in a recession, Whirlpool warns

The median age of an occupied housing unit is more than 40 years, the analysts said. Nearly half of housing units inhabited by their owner are at least 47 years old, the analysts said. Housing turnover, they said, had been depressed over the past three years. But they didn't expect that to last.

"This depressed level of housing transactions is a result of an elevated rate environment, the lock-in effect (where homeowners have previously secured lower mortgage rates and are unwilling to move) and affordability issues," the UBS analysts said.

"As these headwinds subside, we think that the pool of [roughly 1 million] potential home buyers will gradually and over time get off the sidelines," they said.

-Bill Peters

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May 11, 2026 13:07 ET (17:07 GMT)

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