Rising interest rates and uncertainty over immigration policies are further dampening the US housing market, as homeowners delay renovations and home sales.
Shares of Jeld-Wen Holdings, a major seller of doors and windows, plunged 6% on Friday to an all-time low of $5.50, following its forecast that revenues would decline 4–9% in 2025. Despite the company’s chair, David Nord, purchasing $119,000 worth of stock in a show of confidence, investor sentiment remained weak.
Other home improvement-related companies, including AO Smith (water heaters) and BlueLinx (plywood), have also seen share prices tumble. AO Smith predicts flat or modest sales growth in 2025, while BlueLinx warned of continued uncertainty around a housing market recovery.
The Federal Reserve’s decision to maintain higher interest rates has put significant pressure on the residential remodeling and construction sector, which accounts for 4% of US GDP. With mortgage rates hovering around 7%, pending home sales hit an all-time low in January, according to the National Association of Realtors.
Home Depot, the largest US home improvement retailer, did see same-store sales return to growth, but management projects just 1% growth for 2025—a sign of continued caution among homeowners.
Adding to market uncertainty is Donald Trump’s stance on mass deportations, which could disrupt the construction workforce. ISI Evercore estimates that 15–20% of construction workers are undocumented, meaning stricter immigration enforcement could create major labor shortages.
Kurt Yinger, VP at DA Davidson, noted that concerns over deportations are already affecting the industry. “If siding crews don’t show up, that delays projects and adds risk to an already weak demand outlook,” he said. BlueLinx also flagged immigration enforcement as a potential risk in its latest annual report.
Shyam Reddy, CEO of BlueLinx, warned that any policy moves increasing the cost of home ownership would be “counterproductive” to the housing market.
With high mortgage rates, cautious consumer spending, and labor shortages looming, 2025 is shaping up to be a difficult year for the US home improvement sector. While some companies remain optimistic, the overall market remains sluggish, with potential policy changes adding to economic uncertainty.
