Citigroup Inc.C
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Digital Finance & Tokenization
Citigroup Inc.Citi Cites Rates, Affordability as Home Improvement Stocks Lag in 2026
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Citi analysts said uncertainty around interest rates, energy costs, housing affordability and geopolitics is weighing on the U.S. home improvement industry and its stocks in 2026, after attending the HIRI Home Improvement Insights Summit. Economists at the summit broadly expect home improvement demand to remain flat over the next 12 months, with higher rates and weak housing affordability the key constraints, offset partly by resilient consumers, a stable jobs market and household wealth. HIRI survey data indicated mortgage rates in the 5% range could be an important psychological threshold for homeowners considering moving from existing mortgages, with about 80% of homeowners with mortgages currently holding rates below 6% and half below 4%. A homeowner survey found roughly one-third of projects are currently being delayed or cancelled, while a separate contractor survey showed 60% of professionals had experienced at least one cancelled project, a substantial increase from last year, with projects that proceed increasingly focused on maintenance and repairs. Longer-term fundamentals remain supportive: Americans now stay in their homes an average of 10 to 11 years versus roughly seven to eight years previously, the average U.S. housing stock is 44 years old, homeowners hold about $450,000 in average household equity, and the U.S. has seen roughly two decades of underbuilding in single-family homes, according to an economist from the National Association of Home Builders. Lowe's technology chief said its AI strategy centres on augmenting employees rather than replacing them, and recent weakness in home improvement stocks suggests investors are pricing in the possibility that sluggish industry growth extends into 2027.
Citigroup Inc.