Peak home-selling season is winding down quietly as borrowing costs push toward 7%. That backdrop is nudging some people to improve what they have rather than hunt for a new place. Arhaus CEO John Reed put it plainly on the company's August earnings call: "A lot of people are putting money back into their homes as they have decided maybe not to move." He added, "We're seeing a really nice increase in people coming in, being very serious about renovating a room or entire house."
Bank of America Institute sees a similar pattern, writing that "some homeowners are choosing renovation over relocation." Renters are not necessarily remodeling, but they are buying more stuff for their spaces.
The Bank of America analysis shows renters' furniture spending in July rose 5.8% from a year earlier. Why the pickup? "The improvement in renters' spending likely reflects lower rent payments," Bank of America's economist Joe Wadford wrote.
Credit data is edging up too. Utilization of home equity lines of credit is increasing, according to the same report. Some of that activity is debt consolidation, and, as Wadford noted in late August, "homeowners may be using their Heloc loans to renovate instead of relocating."
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Housing activity remains soft. According to government data, new-home transactions during January-July were lower than in the equivalent period a year ago. Existing sales measured by the National Association of Realtors are running slightly ahead of the comparable period in 2025, but still look muted versus history.
The retail readout is a mixed bag. As of Thursday's close, Home Depot and Lowe's had declined 7.6% and 16.3% year to date, respectively. Furniture names including Arhaus, RH, La‑Z‑Boy, and Ethan Allen Interiors are also lower year to date, despite higher-end customers showing up. "The high-end has certainly been a nice bright spot in what has a generally been a pretty weak broader housing industry," said TD Cowen analyst Max Rakhlenko, who follows home improvement and furniture companies.
Rakhlenko says consumers' finances look fine, but sentiment is too gloomy for big overhauls. People will tackle the must-dos like leaky roofs and broken appliances, while the more discretionary side of the market, from full projects to one-off splurges, is feeling the squeeze. He sees pent-up demand building. His team's August survey found 38% of respondents plan to buy furniture in the next three months, the highest share since at least early 2024.
Rates that dipped under 6% early this year and then drifted up near 7% are freezing moves for many and funneling some spending into existing homes. That shows up in rising HELOC use, stronger furniture purchases by renters, and steadier demand at the top end. If you are watching the space, the picture is uneven: broad weakness in home improvement and furniture stocks, pockets of resilience among wealthier shoppers, and a market that could reawaken if confidence turns.
