Home Depot says customers are putting off larger home-improvement projects as stubborn interest rates and worries about the economy fester
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Consumers are hesitant to take out loans for bigger projects, said Home Depot’s CFO.
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real estate
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August 19, 2025
03:54 PM
Fortune
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Economy· Depot Depot says customers are putting off larger -imvement jects as stubborn interest rates and worries the economy festerBy Marco Quiroz-GutierrezBy Marco Quiroz-GutierrezReporterMarco Quiroz-GutierrezReporterRole: ReporterMarco Quiroz-Gutierrez is a reporter for Fortune covering general news.SEE FULL BIO Depot reported its earnings Tuesday.David Paul Morris—Bloomberg via Getty Images Depot customers are putting their kitchen remodels and bathroom upgrades on hold as they turn instead to smaller jects that can be funded in cash, painting and yard imvements, said Depot execs
The company reported solid earnings Tuesday but warned customers are hesitant to take on debt to fund larger -imvement jects as interest rates remain stubbornly high
Depot customers are putting their big -imvement jects on hold as worries the economy and interest rates have them sticking to smaller jects
While people may be painting again and working on their yards, they aren’t pulling the trigger on larger imvements, said Depot CEO Ted Decker during Tuesday’s earnings call
These bigger -imvement jects are usually financed through loans, while smaller jects can be with cash payments, which plays into consumers’ hesitancy, said Depot chief financial officer Richard McPhail
Consumers aren’t canceling that debt-financed kitchen remodel or bathroom upgrade, but they “are still deferring larger jects as a result of general uncertainty and higher borrowing costs in the form of interest rates,” McPhail told The Wall Street Journal
Interest rates have remained stubbornly high in the aftermath of the Fed’s battle with inflation
The Fed has maintained interest rates between 4.25% and 4.5% since late 2024, although some are looking to Fed chairman Jerome Powell’s s at the upcoming Jackson Hole Economic Policy Symposium for signs of an impending cut
Meanwhile, economists have increasingly warned the threat of stagflation, a combination of low growth and high inflation, as the year-over-year inflation rate increase stood at 2.7% in July and threats to employment grew
Still, consumers are steadily tackling smaller imvements despite a recent slowdown in the housing market, which has meant fewer jects being before and after selling a
Part of the reason Depot has persevered is because its customer base is wealthier, and made up of 80% owners
This demographic group has largely stood firm, benefitting from steady employment and a sharp increase in perty values since 2019 while tariff uncertainty and inflation has caused other, less affluent, groups to pull back on spending in some areas. “Our customer is healthy, and we think that’s what has supported their level of engagement in imvement,” McPhail told CNBC
Depot’s earnings report includes its busy springtime season, where both owners and contractors take on more jects due to warmer, dryer weather
Its spring Black Friday sales event saw a boost in its appliance, gardening, plumbing, and electrical departments, associated with smaller jects
Still, sales were not as nounced in the kitchen countertops and bath that are typically associated with larger jects, McPhail told CNBC
Still, the boost in smaller jects helped Depot report $45.28 billion in revenue for the quarter, an imvement over last year during the same period, although just under the $45.41 billion analysts expected
The company’s stock led the Dow higher with a 3.17% advance Tuesday as of midday.Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world
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