Home improvement retailer Lowe’s is expecting a temporary slowdown in the demand for home improvement projects this year, citing factors such as a chronic undersupply of homes, millennial household formation, and a sustained number of people working from home. Lowe’s CEO Marvin Ellison remains confident that home improvement demand will eventually trend upwards across both homeowners and professionals. Despite reporting a 6.2% decrease in comparable sales in the last quarter, Lowe’s forecasts a 2% to 3% decline for the full year 2024 due to DIY customers holding off on bigger ticket items.
Factors such as historically low sales of previously occupied homes, high mortgage rates, and stable home prices are contributing to the sluggish demand for home improvement projects. With uncertainty surrounding the timeline of Federal Reserve interest rate cuts and consumer spending habits, there is a lack of confidence that the demand for home improvement will pick up in the near future. Wall Street analysts like D.A. Davidson’s managing director Michael Baker predict that same-store sales will most likely continue to decline in the first half of the year before potentially improving in the second half or later in 2024.
While some economic indicators remain unfavorable for the home improvement sector, Lowe’s and other retailers are optimistic that the market will eventually rebound. The company is closely monitoring key factors like interest rate cuts and housing market trends to anticipate when consumer spending habits will shift and drive demand for big-ticket purchases. As the year progresses, industry experts will continue to assess the market conditions and consumer behavior to gauge the potential for a recovery in the home improvement sector.