Rising Home Safety Concerns Highlight Undervalued Renovation Plays for 2025 Recovery

The deferred renovation crisis of 2025 has created a ticking time bomb of home safety risks—from mold-riddled attics to structurally unsound roofs—that could soon ignite a wave of demand for repairs and upgrades. As economic headwinds ease, investors should look to undervalued companies positioned to capitalize on this pent-up demand, particularly those offering solutions to address aging housing stock, climate resilience, and accessibility needs. Here's why home safety and renovation-focused stocks are primed for growth.

The Perfect Storm of Home Safety Risks

Economic uncertainty and high interest rates have led 71% of homeowners to delay critical renovations, according to a 2025 Angi survey. Postponed projects like roof repairs, HVAC upgrades, and accessibility modifications are now creating hazards: water damage triples repair costs within six months, while deferred electrical work risks fire outbreaks. Meanwhile, aging infrastructure in homes built before 2000—over 60% of the U.S. housing stock—exacerbates issues like mold growth and inefficient energy systems.

This backlog of deferred projects is a double-edged sword: it creates financial strain for homeowners today but also sets the stage for a surge in demand once economic conditions stabilize. Analysts at KB Home estimate a potential “Golden Age of Remodeling” by 2026–2027, with annual growth rates exceeding 10%. For investors, this means targeting companies that can deliver safety-focused solutions at scale.

Key Undervalued Plays in Home Safety and Renovation

1. KB Home (KBH): A Undervalued Builder with Built-to-Order Resilience

KB Home's Built-to-Order (BTO) model accounts for 60–70% of sales, enabling customization that caters to safety-conscious buyers. With a focus on energy-efficient systems and affordability, KBH is well-positioned to capture demand for weather-resistant construction and resilient design.

Despite a 12% revenue decline in Q2 2025 due to macroeconomic pressures, KBH trades at a 23% discount to its $67 median analyst target. Its geographic diversification (e.g., Texas and Carolinas) and 74,837 controlled lots offer a runway for growth as remodeling demand rebounds.

Risks: Margin pressures from rising material costs and Fed policy uncertainty.

2. Neobo Fastigheter AB (NEOBO): Scandinavian Renovation Leader

Sweden's Neobo is a hidden gem in property management, specializing in aging-in-place upgrades and climate-resilient renovations. Its 2025 plans to renovate 100 apartments with safety features like slip-resistant surfaces and energy-efficient systems align with global trends.

Trading below its “fair value” according to analysts, NEOBO benefits from rising demand for sustainable living spaces. Its water recycling pilot project and focus on reducing microplastics in wastewater also position it as a leader in eco-conscious renovation.

Risks: Geopolitical shifts in European housing policy and supply chain bottlenecks.

3. Home Depot (HD): The Retail Catalyst for DIY Safety Upgrades

Home Depot's dominance in home improvement supplies makes it a direct beneficiary of rising renovation activity. With online building material sales nearly doubling since 2019, HD is adapting to e-commerce trends while offering safety-focused products like smart thermostats and leak detectors.

Despite a 5% dip in Q2 2025 sales, HD's stock trades at 1.2x its 5-year average P/E ratio, signaling undervaluation. Its partnerships with contractors and financing options (e.g., Home Services) further strengthen its position.

Risks: Overstocking inventory during demand lulls and rising labor costs.

4. Simpson Strong-Tie (SSTK): The Hidden Gem in Structural Safety

This niche player manufactures structural connectors and fasteners critical for reinforcing roofs, walls, and foundations—key areas of deferred maintenance. As homeowners prioritize disaster-resilient renovations, SSTK's products become must-haves for contractors.

With a P/E ratio of 18 (below its 5-year average of 22) and a 2.1% dividend yield, SSTK offers both growth and income potential.

Investment Strategy: Ride the Renovation Wave

• Prioritize safety-first stocks: Focus on firms with exposure to climate resilience (e.g., impact-resistant windows), accessibility upgrades (e.g., non-slip flooring), and smart home security systems.
• Look for operational flexibility: Companies like KB Home and Neobo with diversified land portfolios or tech-driven supply chains will outperform during volatility.
• Monitor macro indicators: Track mortgage rates (a 6% threshold could trigger a surge), home equity utilization, and federal policies like the Whole-Home Repairs Act of 2025.

Conclusion

The deferred renovation crisis isn't just a homeowner headache—it's an opportunity for investors. Companies like KB Home, Neobo, Home Depot, and Simpson Strong-Tie are undervalued gateways to a remodeling boom fueled by safety needs, aging demographics, and climate adaptation. As economic uncertainty fades, these stocks could deliver outsized returns, making them essential holdings for any growth-oriented portfolio in 2025 and beyond.

Investment advice: Consider a staged approach, entering positions in these names as mortgage rates dip toward 6% or government stimulus for home safety upgrades is announced.