Consumers are choosing to delay large kitchen and bathroom remodels in favor of smaller projects that can be funded with cash, such as painting and yard improvements. Despite solid earnings reported by Home Depot, there is a noticeable hesitance among customers to take on debt for larger renovations due to persistent high interest rates and economic concerns. CEO Ted Decker and CFO Richard McPhail highlighted that while some projects are delayed rather than canceled, overall consumer confidence remains shaky. This shift has also been influenced by a slowing housing market.
Home Depot customers are shifting focus from large home-improvement projects to smaller cash-funded projects like painting and yard improvements due to economic uncertainty and high interest rates.
Home Depot reported solid earnings but acknowledged that customers are hesitant to take on debt for larger projects, opting instead for smaller, manageable improvements.
CEO Ted Decker noted that while consumers are engaging in smaller projects, they are deferring significant remodels, primarily due to worries about borrowing costs.
The Fed's persistent high interest rates, currently between 4.25% and 4.5%, have led consumers to avoid larger projects, reflecting a broader economic apprehension.
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