Home Improvement Downturn Flashes Red For Housing Market

The home improvement industry is often viewed as a leading indicator of the broader housing market cycle. The weak third-quarter results from deck-board maker Trex reinforced that deteriorating home-improvement trends are accelerating, with the downturn now expected to extend into early 2026.

Goldman Sachs analysts, led by Managing Director Kate McShane, offered clients an updated snapshot at the home improvement industry, which remains stuck in a multi-year slump and now faces the risk of deeper contraction as the industry normalizes from its post-Covid boom.

McShane cited U.S. Census Bureau data showing that retail sales at building material, garden equipment, and supplies dealers fell 5.7% year-over-year in August, following a 1.4% decline in July (not seasonally adjusted).