Home improvement retailers are beginning to show clearer signs of recovery as measures of home equity extraction have turned more positive. Adjusted home equity extraction dollars reached $61 billion in the most recent quarter, a year-over-year increase of $12 billion.
Part of the shift appears to be driven by renewed interest in home equity loans, with home equity lines of credit - HELOCs - emerging as a notably active channel. Origination activity for HELOCs rose 29% year-over-year, and withdrawal volumes climbed to levels not seen since 2007. Market observers note that if HELOC rates move below the 8% threshold, withdrawal activity could pick up further, which would likely support spending on home improvement projects.
How the data maps to retailer performance
The recent home equity trends have a track record of correlating with big-ticket transaction trends at large retailers. Below are the company-level developments that reflect this relationship.
Home Depot - Home Depot Inc reported a 2.3% year-over-year rise in big-ticket comps for Q3, defined in the company s reporting as transactions over $1,000. That result trailed the 2.6% growth recorded in Q2, which had been the highest rate since Q4 2022. Historically, Home Depot's larger-transaction performance has moved in step with home equity extraction trends; periods of softening in the late 2018 and early 2019 timeframe coincided with declines in home equity extraction.
The company has observed relative stability in purchases of larger discretionary items such as appliances, grills and patio furniture, even as demand for major remodel projects remains subdued. Following Home Depot's investor conference, several analysts updated their views: firms including UBS and Truist Securities kept Buy ratings in place while modifying price targets to reflect the retailer's outlook.
Lowe's - Lowe's Companies reported a 2.9% year-over-year increase in big-ticket comps for Q3, where the company measures big-ticket at transactions over $500. That represented a slowdown from Q2's 3.6% growth but remained above the 1.3% increase seen in Q1. Similar to Home Depot, Lowe's big-ticket comps have historically tracked home equity extraction patterns, with noticeable softening observed in 2013 and 2018 during periods of falling extractions.
Lowe's had seen its big-ticket comps turn negative in Q1 2023, but the metric returned to positive territory in Q1 2025 following improvements in home equity extraction that began in Q2 2024. The company also expanded its commercial and marketing presence by enlarging its partnership with Inter Miami CF to become a main sponsor, with the Lowe's logo placed on the team's jersey sleeves. As with peers, analysts adjusted price targets after recent disclosures; Truist Securities and UBS both maintained Buy ratings.
Floor & Decor - Floor & Decor reported a 1.8% increase in ticket comp for Q3, down from a 3.8% gain in Q2, which had been the strongest since Q1 2023. FND's ticket comp trend has shown a relationship with adjusted home equity extractions dating back to 2018. The retailer's ticket comp accelerated through 2021 and 2022 when home equity extractions rose, and then declined when extractions went negative in late 2022.
After adjusted home equity extractions swung positive in Q2 2024, Floor & Decor's ticket comps moved from less negative to positive over the following two quarters. The company received rating changes from major brokers: Goldman Sachs upgraded Floor & Decor to Neutral from Sell, while Piper Sandler raised its rating to Overweight from Neutral. FND also expanded its physical footprint with a new warehouse store opening in Dearborn, Michigan.
While the data and recent company performance point to a rebound in spending on larger retail items related to home improvement, retailers continue to show uneven recovery across categories - with stability in certain big-ticket discretionary products but weaker demand for broad, large-scale remodel projects.