Lowe’s says shoppers are sticking to small projects as the home-renovation slump drags on
In a recent earnings call, Lowe’s CEO Marvin Ellison highlighted a notable shift in consumer behavior as homeowners increasingly opt for smaller home improvement projects instead of embarking on expensive renovations. This trend comes in the wake of elevated interest rates, which have made larger discretionary purchases less appealing for many. Despite these challenges, Lowe’s has reported a positive uptick in sales for affordable upgrades, such as water heaters, kitchen sinks, and windows. These modest investments signal a potential rebound in consumer confidence and spending, which could pave the way for more significant home improvement projects in the future.
Lowe’s third-quarter results exceeded analysts’ expectations, showcasing the resilience of the home improvement sector amid economic uncertainty. The company’s emphasis on digitizing its sales process and expanding product selections has played a crucial role in driving sales in these smaller categories. However, Ellison noted that many homeowners are still hesitant to commit to larger renovations, largely due to concerns over affordability and the broader economic landscape. The high interest rates have deterred homeowners from taking out loans for significant projects, leaving them in a holding pattern until conditions become more favorable. Ellison estimated that once interest rates decrease, homeowners could unlock between $11 billion to $13 billion in equity for borrowing, potentially revitalizing the market for larger renovations.
Looking ahead, Lowe’s executives expressed cautious optimism about the upcoming year. CFO Brandon Sink mentioned that if interest rates were to decline further, it could serve as an additional stimulus for homeowners to invest in their properties. While the company refrained from making specific predictions about when this shift might occur, the sentiment surrounding smaller home improvements offers a glimmer of hope for a more robust recovery in the home renovation sector. As consumers navigate the complexities of the current economic climate, Lowe’s remains a key player in facilitating home upgrades, providing essential products and services to meet the evolving needs of homeowners.
Lowe’s customers are spending on small home-improvement projects, but staying away from more expensive renovations.
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Lowe’s customers continue to steer clear of pricey renovations amid elevated
interest rates
.
The CEO pointed to small upgrades as a potential sign of “brighter days ahead” on an earnings call.
From water heaters to windows, see where Lowe’s executives have seen home spending pick up.
Homeowners
are staying away from big renovations, but Lowe’s says some are taking on smaller projects — an encouraging sign going into 2026.
Some
Lowe’s customers
are spending on relatively affordable improvements to their homes, CEO Marvin Ellison said on the retailer’s third-quarter earnings call on Wednesday. Such purchases include water heaters, kitchen sinks, and windows, executives said on the call.
Sales in those areas have also benefited as
Lowe’s has digitized
more of its sales process and added new product selections in some categories, executives said.
While modest compared to a whole-home renovation or new construction, these projects represent “signs of life in areas that make us cautiously optimistic that maybe there are brighter days ahead,” Ellison said.
The home-improvement retailer reported third-quarter results that exceeded analysts’ expectations, though its guidance for 2025 profit came in lower than predicted.
Many homeowners continue to push off more expensive projects, Lowe’s executives said.
Ellison said that “affordability and uncertainty in the broader
economy
continue to weigh on consumer confidence, particularly when it comes to larger discretionary purchases.”
High interest rates
over the past few years have made it less attractive for many people to spend on home renovations, particularly if they have to take out a loan to do it.
Despite rising home prices
increasing borrowing opportunities,
many homeowners are waiting for interest or mortgage rates to decrease before making bigger-ticket purchases, Ellison said on Wednesday’s call. When that happens, it could open up between $11 billion to $13 billion in equity that homeowners could borrow against, he added.
While Lowe’s executives avoided making a prediction about when this might happen, they said that the company is optimistic about conditions going into the new year.
“If we do see further near-term rate reductions, that could act ongoing as an additional stimulus,” Brandon Sink, Lowe’s CFO, said on the call.
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