CINCINNATI — America's two biggest home improvement chains are sounding the alarm this month about slower sales and shoppers cutting back on do-it-yourself projects.
Lowe's, a top destination for homeowners planning improvements, just reported quarterly sales down 5% from last year.
Home Depot, which sells more to contractors, still reported a 3% drop.
Brenda Thomas is the type of customer they depend on.
The Cincinnati homeowner needs several repairs done to her Bond Hill home.
"Those are gonna have to get pushed to the side until I figure out how I can do that," she said.
Why homeowners are postponing projects
Like so many homeowners, Thomas is delaying projects due to inflation, rising insurance rates and rising property taxes.
Fortune Magazine, in a new report, says the trend is "hammering the home improvement industry."
What's interesting is that Target just reported decent sales, which suggests that consumers are still shopping for clothing and back-to-school supplies.
Many are just cutting back on home improvement projects, because they often require loans and, in many cases, are not essential.
"You see how stressed household budgets are, and the day to day reality households are facing, where a paycheck just doesn't cover the escalation of household expenses," said Greg McBride of Bankrate.com.
It's a sharp contrast to 2022, when homeowners flush from stimulus checks and low interest rates were flocking to home and garden shows and planning big projects.
Contractors and appliance manufacturers, at the time, could not keep up with the demand.
But in 2024, stimulus money is gone, interest rates are high and many homeowners are spending their money on groceries and other essentials, pushing off those DIY projects to next year.
What could turn things around
So what will change things, and bring homeowners back to the home improvement chains?
Analysts say lower interest rates could be a spark to get people to open their wallets again.
If the Federal Reserve lowers interest rates in a few weeks, as expected, that will in turn bring down credit card rates and home equity loan rates.
That would be very good news for homeowners like Brenda Thomas, so you don't waste your money.
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