Home Centers & Hardware Stores NAICS 444110, 444140

Sep 23, 2025 - Fed Rate Cuts Could Boost Home Improvement Demand

• Industry observers suggest that lower interest rates and record homeowner equity could spur a rebound in remodeling spending. The Federal Reserve cut its benchmark overnight interest rate from 4.25% to 4.0% on September 18 amid a tepid labor market, and the central bank is expected to announce more cuts before the end of the year, according to Reuters. Home centers and hardware stores could see an uptick in demand if lower interest rates for home equity lines of credit and mortgages, key channels for home-improvement financing, prompt homeowners to move ahead with projects. In its second-quarter report to investors, Home Depot said some customers hesitated to move forward with big-ticket improvements.
• In August, Lowe’s reported solid second-quarter sales and net income and announced an acquisition that it hopes will help it better compete in the professional builder market, according to the Wall Street Journal. Lowe’s sales increased from $23.59 billion in Q2 2024 to $23.96 billion in the second quarter of 2025. Net income grew from $2.38 billion to $2.4 billion over the same period. The company also said it would purchase Foundation Building Materials from private equity firms American Securities and Clayton, Dubilier & Rice for $8.8 billion. Foundation is a distributor of interior building products, including drywall, ceiling systems, insulation, and commercial doors and hardware.

• Home centers and hardware stores that sell appliances may source more inventory from the US to remain competitive on price while maintaining margins. GE Appliances, a division of China-based firm Haier Smart Home, will invest about $3 billion over five years to modernize and expand its facilities in Alabama, Georgia, South Carolina, and Tennessee, according to The Wall Street Journal. The move aims to reduce the financial impact of US tariff policy by reshoring work currently done in GE Appliance plants in China and Mexico. The total investment includes a previously announced $490 million to expand a washing machine factory in Louisville, Kentucky, GE Appliances’ US base. The chief executive of GE Appliances said that building products closer to end markets has long been part of the firm’s strategy. Still, trade conditions informed the decision to revamp existing US operations.
• Home builder confidence in the single-family market was unchanged in August but remained solidly in negative territory in September, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), remained at 32 in September 2025, unchanged from August’s reading. Any HMI reading over 50 indicates that more builders see conditions as good than poor. Home builder sentiment has been stuck in the 30s since May 2025, but in the most recent survey, builders were optimistic that interest rates would move lower and stimulate demand. The HMI survey also showed that 39% of builders reduced home prices in September to lure potential buyers off the sidelines, although the average price reduction of 5% has remained unchanged since November 2024.