Explaining These Robust Home-Improvement Names

Both Home Depot (HD) and Lowe's (LOW) present a mystery: How can these companies put up such strong numbers if rates are rising and the home industry could be slowing? The bear case is that fewer home sales and fewer home equity loans mean fewer renovation projects.

Interestingly, those arguments didn't hold up even in the housing bust. Look at the charts of Home Depot and Lowe's from 2007 to 2010, compared with a random housing name (I used Hovnanian (HOV)). Housing got destroyed, and home improvement slowed down, but not by a lot. It is perfectly within historical patterns for rising rates not to slow down home-improvement projects!...170 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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