The pace of home remodeling spending is predicted to slow, despite the fact that more homeowners are staying in their homes instead of selling, due to the continued appreciation of home prices and rising interest rates.
While Harvard University's Joint Center for Housing Studies estimates remodeling spending will increase in 2019, the pace is expected to slow, citing housing market "inertia" and interest rate hikes, according to MarketWatch. Credit Suisse stock analyst Seth Sigman recently downgraded Home Depot and Lowe's to neutral, saying, "moderating home prices" will leave "less room for upside for the stocks," according to Barron's. A spokesperson for Lowe's tells Business Insider that the company remains confident about investment growth and home prices, "are the key drivers of home improvement growth versus new housing starts."
"When you combine that strong investment mentality with disposable personal income growth and strong consumer credit, consumers tend to spend more on home improvement projects," the spokesperson told Business Insider. "As they have increased financial ability to invest in those homes, it certainly drives demand for home improvement, both in terms of discretionary remodels and renovations and necessary repair and maintenance projects."
