Aug 18, 2022 - Economy & Business

Home improvement is still hot

Illustration of a roll of turf opening to reveal flowers, a bee, and a mushroom.
Illustration: Lindsey Bailey/Axios

Americans are still pretty obsessed with sprucing up their homes, even with prices rising, a cooling housing market and the return of more options for weekend activities.

Driving the news: Home Depot and Lowe's executives on their respective earnings calls this week said that shoppers continued to spend on building materials, plumbing, paint and high-end mowers and appliances during the second quarter.

  • And when asked repeatedly by analysts if they expect a cool down in sales as the housing market has slowed, the consistent response was "no."
  • "While we acknowledge that housing turnover has slowed, home prices and home equity remains at record highs, which give customers confidence that they will get a return on the investment that they make in their homes," Lowe's CEO Marvin Ellison said.

The intrigue: The fact that home improvement and DIY trends have stuck around stands in contrast to other pandemic habits that have stalled.

  • Companies previously boosted by those fads — like Peloton, Robinhood and Shopify — have seen business sputter as the health crisis has waned.

Details: Home Depot reported record quarterly sales and profits on Tuesday, of $43.8 billion and $5.2 billion, that beat expectations and said a backlog of projects reflect sustained strong demand.

  • Lowe's the next day reported lower sales than expected of $27.5 billion due to what it said was a shortened spring, but profit of just under $3 billion which beat expectations.

Be smart: Home Depot customers are more evenly split between professional contractors and average consumers. Lowe's skews more toward DIY-ers, but the company said its sales to professionals rose 13%.

The big picture: Housing prices have continued to grow even as home sales keep falling.

  • July data out today from the National Association of Realtors shows a sixth consecutive month of existing home sales decline.
  • "We all appreciate the headlines and follow those very closely, but we have not seen anything in our business yet from macro housing," Home Depot CEO Ted Decker said.
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