Home renovation craze lifting Lowe's
With homeowners taking advantage of low rates to refinance, home improvement companies are getting a boost.
If your neighborhood is like mine, the sounds of drills and hammering have become commonplace background noise. With mortgage rates near record lows, many homeowners are opting to refinance their homes -- and take some money out to help with remodeling their houses.
Those trends are translating into a boost for home-improvement companies such as Lowe's (LOW), which on Tuesday said it will hire 45,000 seasonal workers to staff up ahead of the spring season.It's not just refinancing that's boosting sales of paint and construction supplies: Last year, sales of existing U.S. homes rose to their highest level in five years.
The pickup in home remodeling is backed up by research from Harvard University's Joint Center for Housing Studies, which earlier this month predicted that spending on home improvements will continue to pick up pace.
"Through the first three quarters of 2012, investment in the residential sector was responsible for one out of every six dollars added to our GDP," said Eric Belsky, managing director of the Joint Center, in a statement. "Moving forward, home improvement spending is expected to make an even larger contribution to GDP growth."
Sales of existing homes may rise more than 7% this year, the highest since 2007, reports Bloomberg, citing a median estimate of economists and housing analysts. Prices may gain 3.3%, after jumping 4.5% in 2012.
Lowe's isn't the only home-improvement company getting a boost from the housing market's resurgence. Paint company Sherwin-Williams (SHW)'s stock surged 74% in the past 12 months. Demand for its paint and higher prices boosted third-quarter sales by 4.8%. The company plans to release its fourth-quarter results on Jan. 31.
Lowe's and competitor Home Depot (HD) have also seen a boost to their shares amid the housing recovery, rising 44% and 48%, respectively, during the past year. Lowe's has a tentative date of Feb. 25 for its fourth-quarter earnings report, while Home Depot has scheduled its report for Feb. 26.
More in moneyNOW
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Sales of collectible automobiles hit an all-time record this year, leading some to speculate that soaring prices could lead to a huge deal.
- Bah, humbug! New Christmas tree tax proposed
- Should you get a store credit card?
- The best credit cards of 2013
- Can a new chief exec keep GM on course?
- 'Tips for Jesus' big spender unmasked?
- Chinese investors are buying up Detroit
- Mega Millions jackpot hits $344 million
- 5 reasons to think twice about a balance transfer card
- Will I have to pay taxes because of a foreclosed home?
[BRIEFING.COM] Equity indices settled on their lows following a steady, session-long slide. Similar to yesterday, small-caps paced the retreat as the Russell 2000 fell 1.6%, extending its December loss to 3.6%. The S&P 500 settled lower by 1.1%, widening its month-to-date decline to 1.3%.
There was no specific news catalyst behind today's slide, which had the markings of broad-based profit-taking. Seven of ten sectors settled with losses of 1.0% or more while only two groups ... More
More Market News
The offering could become the second-biggest this year if underwriters exercise an option to buy more shares.