Paint, Coating & Adhesive Manufacturers NAICS 3255

Sep 29, 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. Architectural paint manufacturers 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.
• Sales of existing US homes decreased by 0.2% in August from July but were up 1.8% year-over-year, according to the National Association of Realtors (NAR). NAR chief economist Lawrence Yun said, "Home sales have been sluggish over the past few years due to elevated mortgage rates and limited inventory. However, mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months." Existing home sales are an important driver of paint and wallpaper store sales, as sellers often freshen paint before putting homes on the market, and buyers make improvements before moving in.

• Demand for automotive paints and coatings may grow as North American automotive production improves. After a slow start early in 2025, North American light vehicle production is expected to continue to improve, according to S&P Mobility. In the firm’s September 2025 light vehicle production forecast, S&P Mobility upwardly revised its forecast for North American automotive production by 212,000 units for 2025 and 337,000 for 2026. North American vehicle production has increased as manufacturers have adapted to shifts in US trade policy and developed regional workarounds to offset the impact of tariffs.
• New single-family home sales rose 20.5% month-over-month and 15.4% year-over-year in August 2025, according to the US Census Bureau. August’s new home sales reached 800,000 units, the highest number since January 2022. However, some economists told Reuters that the August new home sales numbers are probably inflated and may be revised downward later this year. Other housing bellwether metrics, including builder sentiment and job growth, don’t suggest a sudden surge in new home sales. However, falling interest rates could revitalize the sluggish housing market. 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.