A UBS Evidence Lab survey indicates that U.S. homeowners are showing cautious but steady interest in home improvement projects, suggesting the early stages of a demand recovery that could benefit industry leaders Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW).
The 44th edition of the UBS Evidence Lab Housing Intentions Survey, which polled more than 2,000 adults, found that 59% of homeowners expect to undertake a home improvement project within the next year. That’s a modest uptick from prior readings and above the 12-survey average of 58%.
The results point to “a gradual but sustained improvement” in homeowner activity, which may set the stage for upside in the shares of both Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW), UBS analyst Michael Lasser said in an Oct. 17 report to clients.
Home Depot maintains lead, but Amazon gains ground
Home Depot (HD) remains the top destination for home improvement materials, cited by 53% of respondents, followed by Lowe’s (LOW) at 42% and Amazon (AMZN) at 39%. About a third of those planning to shop at Home Depot (HD) expect to spend half or more of their project budgets there, compared with 25% for Lowe’s (LOW).
Painting remains the most common home project, planned by roughly one in four homeowners, the share intending to buy painting supplies at Home Depot (HD) fell 800 basis points year over year to 30%. Lowe’s (LOW) also dipped slightly, while Amazon (AMZN) gained five percentage points to reach 21%, signaling growing e-commerce traction in smaller DIY categories.
Aesthetic upgrades lead the way
Improving home appearance was the most common motivation for undertaking projects, cited by 46% of respondents, up four percentage points from last year. Other key drivers included repairing or replacing broken parts (37%) and increasing home value or safety, both showing incremental gains year over year.
Among projects expected in the next three months, indoor painting and landscaping or shrub replacement topped the list.
More homeowners hiring professionals
A growing share of respondents said they plan to hire professionals for their projects. Sixty-one percent intend to use a pro for at least part of the job, up four percentage points from last year, with 25% planning to outsource entire projects.
Flooring remains a steady category, with 18% of homeowners planning such work, slightly below last year but still above pre-pandemic averages.
Financial flexibility improving
UBS found encouraging signs of financial resilience among homeowners. Sixty-four percent said they have sufficient funds to pay for projects outright, the highest level since early 2021, while only 19% expect to rely on credit, down from 23% last year.
At the same time, home equity lines of credit (HELOCs), a key funding source for larger remodels, have risen for six consecutive quarters, increasing $15.7 billion year over year in the second quarter of 2025. UBS said this trend is a leading indicator for bigger project spending ahead.
Housing market crosscurrents
Despite elevated interest rates and affordability challenges, the broader housing backdrop offers cautious optimism. Thirty-seven percent of respondents said they plan to buy a home within the next year, the highest level since early 2023. Meanwhile, fewer buyers (15%) cited waiting for lower mortgage rates, down from an average of 17% over the past two years.
UBS noted that while housing turnover remains below historical norms, a gradual recovery could add more than a million potential buyers over the next few years, fueling demand for renovation and repair work as homes change hands.
Modest rebound, measured optimism
While tariff-related uncertainty and affordability constraints continue to weigh on sentiment, only 7% of homeowners cited tariffs as a reason to postpone projects, down from 9% in June.
A gradual reversion toward historic housing turnover could spur a broader pickup in home improvement activity, benefiting Home Depot (HD) and Lowe’s (LOW) as amid renewed consumer investment in the home, UBS said.