Executive Summary:
Despite returning to positive same-store sales growth after two years of declines, Home Depot and Lowe’s remain cautious about their 2025 outlook due to high mortgage rates suppressing home turnover and large-scale remodeling projects.
Home Depot saw a 0.8% increase in same-store sales in Q4, with CEO Ted Decker noting that homeowners are engaging in home improvement spending but hesitating on major renovations due to financing concerns. The company forecasts only 1% growth for the year, assuming no relief in mortgage rates or housing market activity.
Lowe’s experienced a 0.2% uptick in Q4, driven by professional contractors, while DIY customers cut back on discretionary big-ticket projects. The company expects flat to 1% same-store sales growth in 2025, with demand primarily coming from repairs and maintenance rather than upgrades.
Both companies acknowledge that high home equity values, rising incomes, and strong stock market performance could eventually encourage homeowners to invest in renovations. However, they remain uncertain about when the market will rebound, as mortgage rates are expected to stay at or above 6.5% throughout 2025.
While near-term recovery remains uncertain, Home Depot and Lowe’s maintain confidence in the long-term strength of the home improvement sector.
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