Americans have not stopped spending money on their homes, but the latest results from two of the country’s biggest home-improvement retailers suggest they are becoming far more selective about where that money goes.
Second-quarter figures from Home Depot and Lowe’s show a consumer who is still willing to pay for repairs and essential maintenance but appears increasingly reluctant to commit to expensive renovations.
The contrasting outlooks from the two companies offer a useful snapshot of household confidence at a time when high home prices and mortgage rates continue to discourage major moves.
Home Depot Delivers Solid Growth
Home Depot reported a stronger-than-expected second quarter, with sales climbing 5.7% to approximately $47.86 billion.
Adjusted earnings reached $4.92 per share, while US comparable sales increased 1.3%. Comparable sales across the business rose 1.7%.
The company also maintained its full-year forecast, expecting sales to increase between 2.5% and 4.5%.
On the surface, the numbers suggest Americans remain comfortable spending at home-improvement stores.
However, a closer look at shopping patterns reveals a more cautious consumer.
Smaller Jobs Are Winning Over Expensive Makeovers
Home Depot said customers are increasingly choosing projects that require less money and commitment.
Painting, gardening, plumbing, electrical work and other maintenance jobs continue to attract shoppers, while larger discretionary renovations are facing more resistance.
The trend was reflected in the company’s transaction figures. The average comparable transaction increased 2.8%, but the number of transactions declined by 1%.
That combination suggests fewer customers are entering stores, but those who do are spending more selectively on specific needs.
Lowe’s Delivers a More Cautious Warning
Lowe’s results offered an even clearer indication that homeowners are holding back.
The retailer generated nearly $26 billion in second-quarter sales, compared with around $24 billion during the same period a year earlier.
Comparable sales, however, increased by only 0.2%.
Adjusted earnings came in at $4.40 per share, ahead of the $4.22 analysts had expected.
Despite beating expectations on earnings, Lowe’s lowered its full-year sales forecast to approximately $92 billion.
Its previous guidance had ranged from $92 billion to $94 billion.
The company also moved its comparable-sales outlook to flat, down from its earlier expectation of anywhere between flat and 2% growth.
Homeowners Are Waiting Rather Than Trading Down
Lowe’s chief executive Marvin Ellison said the company was seeing customers remain cautious rather than switch to cheaper alternatives.
That distinction is important.
Consumers do not necessarily appear to have abandoned home improvement altogether.
Instead, many seem to be postponing major purchases until they feel more comfortable about the economy, housing conditions and their personal finances.
In other words, homeowners may still want to remodel their kitchens or bathrooms, but they are increasingly willing to wait.
High Mortgage Rates Are Helping Keep the Housing Market Frozen
The hesitation comes against a difficult backdrop for the US housing market.
High mortgage rates and elevated home prices have made it expensive for homeowners to sell their existing properties and purchase new ones.
That has contributed to a relatively stagnant housing market, with many homeowners choosing to remain where they are rather than take on a significantly more expensive mortgage.
Staying put can create demand for home maintenance, but it does not necessarily translate into the kind of large-scale renovation spending retailers would like to see.
Professional Services Are Holding Up Better
Lowe’s results also reveal that not every part of the home-improvement market is struggling equally.
The retailer said its professional business and home-services operations performed strongly during the quarter.
Online sales were particularly notable, jumping 15.7%.
Those areas helped compensate for weaker conditions among do-it-yourself customers and suggest that spending is shifting rather than disappearing completely.
A homeowner who postpones a $30,000 kitchen renovation may still spend several hundred dollars fixing a plumbing problem, painting a room or improving a garden.
The New Consumer Mindset Is Maintenance Over Makeover
The emerging pattern can be summed up simply: maintenance is winning over transformation.
Homeowners appear more comfortable paying for jobs that protect or maintain their existing property than taking on major projects that can cost tens of thousands of dollars.
That could be good news for retailers if household confidence improves, because deferred projects do not necessarily disappear.
They can simply be pushed further into the future.
For now, however, consumers appear determined to keep their financial commitments under control.
Tariff Refunds Are Affecting Retailer Results
Another unusual factor influencing the latest earnings reports was the impact of tariff refunds.
Lowe’s said refunds received during the quarter contributed 11 cents to adjusted earnings per share. The company received approximately $80 million in refunds.
Home Depot reported an even larger benefit, receiving $730 million in tariff refunds.
About $685 million of that amount reduced its cost of goods sold during the quarter.
Those refunds helped retailers offset some of the additional costs associated with tariffs.
Tariffs Could Still Affect Household Budgets
The issue matters beyond corporate earnings.
Tariffs can ultimately influence the prices consumers pay for products ranging from construction materials and appliances to tools and other household goods.
If those costs remain elevated, homeowners may become even more reluctant to embark on major renovation projects.
For households already concerned about mortgage rates, property prices and broader economic uncertainty, higher renovation costs could provide another reason to delay discretionary work.
An Aging Housing Stock Could Keep Demand Alive
Despite the current caution, both retailers see reasons for optimism over the longer term.
Lowe’s expects the housing market to gradually improve, while Home Depot continues to highlight the age of America’s housing stock as an important source of future renovation demand.
Older homes eventually require repairs, upgrades and replacements regardless of economic conditions.
That means today’s postponed projects could become tomorrow’s spending once consumers regain confidence.
What’s Next for Home Improvement Spending?
The key question for retailers is when homeowners will feel comfortable enough to move from basic maintenance to major renovations.
A recovery in housing activity, lower borrowing costs and stronger consumer confidence could encourage households to unlock projects they have delayed.
Until then, Home Depot and Lowe’s appear likely to operate in an environment where customers continue spending — but with much greater caution.
Summary
The latest earnings from Home Depot and Lowe’s suggest Americans are still investing in their homes, but increasingly favouring repairs and smaller upgrades over expensive renovations.
Home Depot reported strong sales growth and maintained its annual outlook, while Lowe’s lowered its forecast and warned of continued pressure on home-improvement spending.
High mortgage rates, expensive housing, economic uncertainty and tariff-related costs are encouraging homeowners to postpone major projects.
At the same time, professional services, online shopping and essential maintenance remain comparatively resilient.
For America’s home-improvement industry, the immediate story is therefore not that consumers have stopped spending.
It is that they are choosing maintenance over makeovers until economic conditions give them greater confidence to spend again.
