This is creating serious problems for retailers. Lowe’s on Wednesday reported a 5.1% comparable sales decline in the second quarter ended in early August. The company expects retail sales to decline 3.5% to 4% this year, compared with previous estimates that called for a 2% to 3% decline. Lowe’s home improvement slowdown is similar to that of rival Home Depot, which sharply revised down its sales forecast after weak second-quarter sales. It now expects comparable sales to decline 3% to 4% this year, a humiliating outlook for the world’s largest home improvement and building materials retailer, compared with its original forecast of a 1% decline.

Lowe’s and Home Depot, which together have more than 4,000 stores in the U.S., admitted they are just waiting, hoping that an expected rate cut would finally get customers warming up to the idea of ​​putting on safety glasses and gloves to resurface their countertops.

“We all recognize that we live in a high interest rate, high inflation environment,” said Marvin Ellison, CEO of Lowe’s. “And so the home improvement customer is just standing on the sidelines waiting for things to turn around.”

In fact, mortgage rates have fallen to their lowest levels in a year, but the recovery for home improvement stores can’t come soon enough. According to Neil Saunders, managing director of GlobalData Retail, home improvement spending typically peaks six to a year after a move. So even if mortgage rates become cheaper, home improvement projects could be on hold until well into 2025. A trend echoed by Harvard University’s Joint Center for Housing Studies, which forecasts a steady increase in home repair spending over the next year.

Accordingly, Ellison attributed the drop in sales largely to reduced interest in big purchases for kitchens, bathrooms and flooring – a continuation of a trend seen late last year. He said bad weather was also to blame, as “wetter weather in May was quickly followed by high heat in June and July across much of the country,” disrupting the usual spring and summer purchases of outdoor furniture and lawn care.

“We’re still about 75% self-built, so any decline in those expensive discretionary categories is going to be a disproportionate impact on us,” Ellison said during the quarterly earnings call.

Home Depot saw it similarly. “During the quarter, higher interest rates and greater macroeconomic uncertainty put pressure on consumer demand overall, resulting in lower spending on home improvement projects,” said Chairman, President and CEO Ted Decker.

With home prices at their highest in nearly 20 years, prospective homebuyers are virtually locked out of the market. While fewer new homeowners mean fewer opportunities for renovations, the home improvement industry could suffer a double whammy from the lock-in effect: Potential sellers, blessed with ultra-low mortgage rates due to the pandemic, are less interested in putting their homes on the market. That means less motivation and fewer opportunities to complete last-minute projects before putting their homes on the market — another blow to home improvement enthusiasts.

Swap procrastinators for professionals

Lowe’s and Home Depot have avoided simply waiting by becoming a haven for professional contractors. Home Depot CEO Decker said earlier this year the addressable market for contractors could grow to $250 billion. The retailer has about half of its customer base made up of professional contractors. It has focused on developing its “pro ecosystem” and acquired SRS Distribution in March, expanding its distribution network and giving it the ability to offer professional-grade inventory.

Lowe’s, which has made a similar shift to contractor-centric sales through loyalty programs and contract deliveries to renovation sites, is already reaping the benefits of the investment. The quarterly decline was offset by a mid-single-digit increase in store sales and a 2.9% increase in online sales from professionals.

“One thing we can confirm with certainty is that our pro business is growing,” Ellison said.

And until homeowners are ready to use power tools again, Ellison believes Lowe’s can weather the crisis.

“While we cannot yet predict a recovery date in the home improvement sector, we are confident that we are in a strong position to gain market share when the market picks up,” he said.