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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