Home Centers & Hardware Stores NAICS 444110, 444140

May 23, 2025 - Home Improvement Retail Giants Reaffirm Their 2025 Guidance

• In recent calls with analysts discussing first-quarter results, executives at Lowe’s and Home Depot reiterated their firms’ full-year guidance for 2025, according to Retail Dive. Home Depot posted a 9.4% year-over-year rise in Q1 revenue and stuck to its full-year guidance of 2.8% sales growth for 2025. Lowe’s notched a Q1 revenue decline of 2% but reiterated its 2025 guidance of sales between $83.5 billion and $84.5 billion. Home Depot’s CEO said the company did not intend to raise prices due to tariffs. More than half of Home Depot’s purchasing is sourced from the US, and by mid-2026, the firm believes that no country outside the US will account for more than 10% of its purchases. Lowe’s CEO didn’t explicitly rule out price hikes due to tariffs, but he said the firm will remain competitive on price. About 60% of Lowe’s purchases are sourced in the US, and about 20% are from China.
• The number of building permits issued for single-family, privately-owned housing units, a demand driver for interior design services, decreased 5.1% in April 2025 compared to March and fell 6.2% year-over-year. Single-family housing starts dropped by 1.6% month-over-month and were down 12% compared to April 2024. Single-family housing completions declined 5.9% in April from the previous month and decreased 12.3% year-over-year. Housing starts in April were pressured by tariff-related economic uncertainty, high mortgage rates, and rising costs for building materials, according to the National Association of Home Builders (NAHB).

• Home remodeling spending is expected to see slight gains through 2026 after two years of weakening expenditures, according to the Leading Indicator of Remodeling Activity (LIRA) report released in April by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 0.8% to $505 billion in the second quarter of 2025 compared to Q2 2024. In the third quarter of 2025, remodeling spending will rise to $506 billion, up 1.4% from Q3 2024. Spending will then increase to $512 billion in Q4 2025, up 1.8% from Q4 2024. In the first quarter of 2026, year-over-year spending is forecast to rise 2.8% to a record $526 billion. Joint Center expects improvements to be supported by increasing home values, a steady labor market, and gradually improving existing home sales. However, uncertainty stemming from trade strife and waning consumer confidence could put downward pressure on remodeling demand.
• US home builders are dangling more incentives to close deals amid a tepid spring home-buying season that is halfway over, according to The Wall Street Journal. Builders typically notch 40% of their annual sales during the spring, but mortgage rates that are stuck around 7% and a lack of affordability have reduced demand. Builders have increased incentives to bring buyers off the sidelines, including mortgage-rate buydowns, design upgrades, and price cuts. In the first two weeks of April, incentives offered by builders equaled 7.2% of the purchase price, up from 6.1% in January, according to data from John Burns Research & Consulting. Incentives are eating into builder profits during a season that usually sees few discounts, and prices tend to rise.