? Home Depot customers are putting their kitchen remodels and bathroom upgrades on hold as they turn instead to smaller projects that can be funded in cash, like painting and yard improvements, said Home Depot execs. The company reported solid earnings Tuesday but warned customers are hesitant to take on debt to fund larger home-improvement projects as interest rates remain stubbornly high.

Home Depot customers are putting their big home-improvement projects on hold as worries about the economy and interest rates have them sticking to smaller projects.

While people may be painting again and working on their yards, they aren’t pulling the trigger on larger improvements, said Home Depot CEO Ted Decker during Tuesday’s earnings call.

These bigger home-improvement projects are usually financed through loans, while smaller projects can be completed with cash payments, which plays into consumers’ hesitancy, said Home Depot chief financial officer Richard McPhail.

Consumers aren’t canceling that debt-financed kitchen remodel or bathroom upgrade, but they “are still deferring larger projects as a result of general uncertainty and higher borrowing costs in the form of interest rates,” McPhail told the Wall Street Journal.

Interest rates have remained stubbornly high in the aftermath of the Fed’s battle with inflation. The Fed has maintained interest rates between 4.25% and 4.5% since late 2024, although some are looking to Fed Chairman Jerome Powell’s comments at the upcoming Jackson Hole Economic Policy Symposium for signs of an impending cut. Meanwhile, economists have increasingly warned about the threat of stagflation, a combination of low growth and high inflation, as the year-over-year inflation rate increase stood at about 2.7% in July and threats to employment grew.

Still, consumers are steadily tackling smaller home improvements despite a recent slowdown in the housing market, which has meant fewer projects being completed before and after selling a home.

Part of the reason Home Depot has persevered is because its customer base is wealthier, and made up of 80% homeowners. This demographic group has largely stood firm, benefiting from steady employment and a sharp increase in property values since 2019, while tariff uncertainty and inflation has caused other, less affluent groups to pull back on spending in some areas.

“Our customer is healthy, and we think that’s what has supported their level of engagement in home improvement,” McPhail told CNBC.

Home Depot’s latest earnings report includes its busy springtime season, where both homeowners and contractors take on more projects owing to warmer, drier weather. Its spring Black Friday sales event saw a boost in its appliance, gardening, plumbing, and electrical departments, associated with smaller projects. Still, sales were not as pronounced in the kitchen countertops and bath categories that are typically associated with larger projects, McPhail told CNBC.

Still, the boost in smaller projects helped Home Depot report $45.28 billion in revenue for the latest quarter, an improvement over last year during the same period, although just under the $45.41 billion analysts expected. The company’s stock led the Dow higher with a 3.17% advance Tuesday as of midday.