Home Depot Stock Set to Boom as US Renovation Wave Takes Hold

Home Depot's stock has been on a rollercoaster ride this year, but investors may be overlooking two key drivers of growth. The company's recent earnings report beat expectations, with customers spending more on smaller projects and its Pro service experiencing solid growth.

The Pro service is a top-to-bottom supplier for contractors, making it a vital component of Home Depot's revenue. This growth points to the start of 'Home Reno Boom 2.0', fueled by high mortgage rates causing people to upgrade their current homes rather than moving to new ones.

According to Harvard University's Joint Center for Housing Studies, reno spending was around $517 billion in the second quarter of 2026, up 2% year-over-year. Homeowners already have the funding lined up for the next reno wave through home-equity lines of credit (HELOCs), which rose by $13 billion to a total of $459 billion in the same period.

Additionally, American homes are getting old, with an average age of 44 years, requiring repairs and replacements. These factors combined create a perfect 'launchpad' for Home Reno Boom 2.0. The stock's current yield is around 2.8%, nearly triple the payout on typical S&P 500 stocks, making it a 'Dividend Magnet' that pulls up share prices.