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Home Depot's Sales Rebound Muted by Inflation in Fuel and Lumber
Home Depot Inc.'s sales rebounded last quarter as Americans took on more remodeling projects, but rising costs for lumber and transportation are weighing on profitability.
[...] Home Depot and its smaller rival Lowe's Cos. are often seen as proxies for the health of the housing sector because property owners spend more on their homes when they believe values are rising. But for several quarters there's been increasing concern that years of robust home-price gains are cooling. For its part, Home Depot has continually said that a shortage of available homes in many markets would actually underpin higher home-improvement spending.
[...] Even as the overall housing market looks to be cooling, several trends are driving demand for home-improvement products. A shortage of available listings has slowed property purchases, causing some owners to opt for sprucing up their homes instead. Additionally, more people are staying longer in their homes, which also supports the uptick.
The labor market also plays a role: A strong run of hiring, coupled with moderate wage growth, has boosted Americans' wherewithal to spend money on fixing up their homes. Spending on home improvement -- which accounts for about 38 percent of private residential construction outlays -- surged 13.8 percent in June from a year earlier to reach $221 billion, according to Commerce Department data. Going forward, the job market may continue to propel housing and remodeling demand. But potential hurdles include a pickup in mortgage rates, a shortage of skilled workers for building and remodeling projects, and rising costs for construction materials such as lumber, which is affected by tariffs.
(Score: 3, Interesting) by Anonymous Coward on Wednesday August 15 2018, @03:09PM (4 children)
Playing right along with the Home Depot survey results...
After 10 years living in our 1960's ranch, we are looking at some major renos. The kitchen was last done in the mid-80s, based on the paperwork left from the original owners and the age of the built-in range/oven. Currently the laundry is in the basement, we might go as far as revising the half-bath that is next to the kitchen to make room for small clothes washer/dryer, making the house "single floor living" (leaving the large capacity washer & dryer in the basement for occasional use). While we have no problems going up and down stairs now, that could easily become a problem in the future. And if we sell, single floor living seems to be a good selling point.
(Score: 2) by MichaelDavidCrawford on Wednesday August 15 2018, @03:25PM (2 children)
I live in a second floor apartment.
I own a piano that is in storage that my mother has been paying for. I'm going to get it shipped to my home soon, where I plan to put it in my garage until I can find a first-floor apartment.
Yes I Have No Bananas. [gofundme.com]
(Score: 0) by Anonymous Coward on Thursday August 16 2018, @01:35AM (1 child)
Laurel and Hardy deliver pianos.
(Score: 2) by MichaelDavidCrawford on Thursday August 16 2018, @04:10PM
When I called them I told them I had a piano. "We have a piano dolly".
When they actually put my piano on it I could see that they'd never used their dolly before. The came quite close to dropping my piano off the ramp up to the u-haul.
Since then I've always taken care to use _real_ piano movers.
Yes I Have No Bananas. [gofundme.com]
(Score: 4, Insightful) by AthanasiusKircher on Wednesday August 15 2018, @03:27PM
That seems to be a minor point missing in the analysis of TFA. The emphasis there seems to be "if people are staying longer in their homes or can't find a new home, they'll spend more on remodeling." I have no doubt that's true and perhaps the most significant driver here.
But one of the other significant reasons home owners undertake renovations is BECAUSE they are trying to sell. Lots of people "live with" inconveniences in their homes, but then when they go to sell, they (or their agent) says, "Uh, we're going to have to fix that, because anyone who takes a tour will notice it." Or stuff shows up that a building inspector would flag -- or the house goes into sale, but an inspection report flags it, and the seller has to agree to fix it. Or whatever.
Often these are minor things. But sometimes a minor "crack" somewhere can be indicative of a larger problem, which then needs to be solved before selling. Point is: sales at Home Depot likely don't just come from those who are staying in their homes, but also those who are really desperate to leave.