Rising remodeling costs could shift Home Depot shoppers toward smaller projects

Rising remodeling costs are already showing up in the kinds of jobs Home Depot associates are likely to see on the floor. A Harvard study flagged flat remodeling permit applications and weaker sales of staples like faucets and windows, a sign that some shoppers are no longer coming in for a full kitchen or bath overhaul but for smaller, more affordable pieces of the project.

That shift matters because it changes the mix of traffic inside stores. When a customer scales back from a complete remodel, specialist conversations often get more complicated, not less. Associates may spend more time comparing product tiers, explaining substitutes, and helping shoppers phase work over several trips instead of one big basket. That can alter demand at the Pro desk, where contractors want fast answers on materials and timing, and it can also push more customers toward do-it-yourself solutions when installation quotes come in too high.

The Harvard Joint Center for Housing Studies still expects the remodeling market to keep growing, but only modestly. Its Leading Indicator of Remodeling Activity projects homeowner renovation and repair spending will rise 2.1 percent year over year in the middle of 2026, then slow to 1.6 percent by the end of the year, reaching $518 billion. The center also says the United States spends more than $600 billion a year on home maintenance and improvement, which is why even a mild slowdown can ripple through a retailer as large as Home Depot.

Labor shortages may be the bigger pressure point. Harvard said immigrants make up about one in five workers nationally but one in three workers in the construction trades. In 2024, three-fifths of plasterers and drywall installers were foreign-born, along with half of roofers, painters, and carpet, tile and floor installers. The center also said the construction trades have roughly one million fewer workers than they did in 2007. For Home Depot stores, that can mean more project delays, more customer frustration over installation lead times, and more questions about whether a simpler product can replace a custom one.

Home Depot has been preparing for a still-fragile market. In December 2025, the company said it would provide a preliminary fiscal 2026 outlook and a market recovery case. Its fiscal 2025 fourth quarter brought $38.2 billion in sales and 0.4 percent comparable sales growth, after $41.4 billion in fiscal 2025 third-quarter sales. Those numbers show the company is still moving massive volume, but they also make clear how much even a slight change in project size, timing, or mix between Pro and DIY shoppers can matter for staffing priorities, sales expectations and the advice associates give every day.