Home Depot and Lowe's poised for growth as US homeowners show cautious optimism in home improvement projects

Home Depot and Lowe's may benefit from a modest recovery in home improvement demand, according to a UBS Evidence Lab survey. The survey indicates that U.S. homeowners are showing cautious but steady interest in home improvement projects, suggesting the early stages of a demand recovery.

According to a recent UBS Evidence Lab survey, U.S. homeowners are exhibiting cautious but steady interest in home improvement projects, suggesting the early stages of a demand recovery. This trend is expected to benefit industry leaders such as Home Depot (NYSE: HD) and Lowe's (NYSE: LOW).

The 44th edition of the UBS Evidence Lab Housing Intentions Survey polled more than 2,000 adults and found that 59% of homeowners plan to undertake a home improvement project within the next year. This represents a modest uptick from prior readings and is above the 12-survey average of 58%. UBS analyst Michael Lasser noted that this indicates a gradual but sustained improvement in homeowner activity, which could drive growth in the shares of Home Depot and Lowe's, according to the Seeking Alpha coverage.

Home Depot remains the top destination for home improvement materials, cited by 53% of respondents, followed by Lowe's at 42% and Amazon (AMZN) at 39%. Approximately a third of those planning to shop at Home Depot expect to spend half or more of their project budgets there, compared to 25% for Lowe's. Painting remains the most common home project, planned by roughly one in four homeowners, although the share intending to buy painting supplies at Home Depot fell 800 basis points year over year to 30%. Lowe's also dipped slightly, while Amazon gained five percentage points to reach 21%, signaling growing e-commerce traction in smaller DIY categories, per the report.

Improving home appearance was the most common motivation for undertaking projects, cited by 46% of respondents, up four percentage points from last year. Other key drivers included repairing or replacing broken parts (37%) and increasing home value or safety, both showing incremental gains year over year. Among projects expected in the next three months, indoor painting and landscaping or shrub replacement topped the list, the article noted.

A growing share of respondents plan to hire professionals for their projects. Sixty-one percent intend to use a pro for at least part of the job, up four percentage points from last year, with 25% planning to outsource entire projects. Flooring remains a steady category, with 18% of homeowners planning such work, slightly below last year but still above pre-pandemic averages, the coverage said.

Encouragingly, UBS found signs of financial resilience among homeowners. Sixty-four percent said they have sufficient funds to pay for projects outright, the highest level since early 2021, while only 19% expect to rely on credit, down from 23% last year. Home equity lines of credit (HELOCs) have risen for six consecutive quarters, increasing $15.7 billion year over year in the second quarter of 2025, indicating potential for bigger project spending ahead, according to the piece.

Despite elevated interest rates and affordability challenges, the broader housing backdrop offers cautious optimism. Thirty-seven percent of respondents plan to buy a home within the next year, the highest level since early 2023. While housing turnover remains below historical norms, a gradual recovery could add more than a million potential buyers over the next few years, fueling demand for renovation and repair work as homes change hands, the report observed.

While tariff-related uncertainty and affordability constraints continue to weigh on sentiment, only 7% of homeowners cited tariffs as a reason to postpone projects, down from 9% in June. A gradual reversion toward historic housing turnover could spur a broader pickup in home improvement activity, benefiting Home Depot and Lowe's as consumer investment in the home renews, the article concludes.