Home improvement demand stays resilient as homeowners keep spending

Homeowners are not walking away from their houses when budgets tighten. They are choosing repairs, maintenance and upgrades that protect the home, improve livability and make economic sense, which is why home-improvement demand is holding up better than many discretionary categories. HIRI’s 2026 spending infographic says the market is still expected to grow over the next few years even as customer confidence stays tempered, and it notes that a majority of homeowners expect to spend the same or more on home improvement in 2026.

The mix of projects matters. HIRI says participation skews toward full-time employed households and medium-income households for major renovations and outdoor projects, while lower-income households are more active in mechanical-system work. That is the kind of spending pattern that rewards a store that can steer a customer from a vague problem to a workable plan, whether the job is a water heater replacement, a roof repair, a bath refresh or a backyard project that needs to be done before the weather turns. HIRI also said overall spending declined at the end of 2025 even as fewer completed projects pushed spend per project higher, a sign that customers are being more selective rather than stopping altogether.

That is the backdrop for Home Depot’s latest numbers. The company reported fourth-quarter fiscal 2025 sales of $38.2 billion on Feb. 24, 2026, down 3.8% from a year earlier, while comparable sales rose 0.4% overall and 0.3% in the U.S. For the full fiscal 2025 year, sales reached $164.7 billion, up 3.2%, with U.S. comparable sales up 0.5%. Ted Decker said the quarter reflected “ongoing consumer uncertainty and pressure in housing,” while also saying underlying demand was “relatively stable throughout the year” after adjusting for storms. Home Depot also lifted its quarterly dividend by 1.3% to $2.33 per share, its 156th consecutive quarter paying a cash dividend.

The company has already framed fiscal 2026 around a cautious but still constructive market, calling for home-improvement market growth between -1% and +1%, comparable sales growth of flat to 2%, and total sales growth of 2.5% to 4.5%. It also put the addressable market at about $1.1 trillion. That lines up with Harvard’s Joint Center for Housing Studies, which says its LIRA has been produced quarterly since 2007 and now projects annual spending on improvements and maintenance to owner-occupied homes will slow sharply in early 2027. HIRI’s 2025 Project Decision Study, which covers 47 project categories and focuses on jobs costing $5,000 or more, says engagement in mid- to large-scale projects remains strong and above historical norms. Its housing analysis found interior additions or replacements accounted for 53% of project volume, while professional projects made up 84% of national spend and 88% in metro areas, with the Pacific region posting the highest average project cost at $7,208.