Aarthi Swaminathan of MarketWatch reports that between high interest rates, inflation, and economic uncertainty, homeowners are taking a pause on big projects, CEOs say. Swaminathan writes:
Elevated mortgage rates and record-high home prices have pushed many would-be home buyers into wait-and-see mode. Now homeowners are playing the waiting game with renovation plans.
Homeowners, who have seen home values shoot up over the past year, have pulled back on home projects and renovations, in part due to uncertainty around inflation and interest rates, according to earnings reports from two home-improvement companies.
Higher interest rates have impacted the housing market and housing turnover, meaning how fast homes change hands, said Ted Decker, chairman, president and CEO of Home Depot, on the company’s second-quarter earnings call on Aug. 13. “That’s also impacting customers’ interest in financing larger projects,” Decker said.
“Everyone is expecting rates are going to fall, so [they are] deferring those projects,” he added.
As concerns about the broader economy have mounted, he said, “there’s just a lot of noise with [the] political and geopolitical environment.” With unemployment ticking up and inflation continuing to gnaw into disposable income, “people just took a pause,” Decker said. […]
To be sure, falling rates have pushed some homeowners to refinance their mortgage, to extract equity from their home, and that’s bringing parts of the housing market out of its slump.
Refinance activity was up 77% as of Aug. 16 from the same period last year, according to data from Fannie Mae.
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