(Reuters) - Home Depot Inc's HD.N profit and revenue topped estimates on Tuesday despite signs of a slowdown in the housing market, boosted by a rebound in demand for seasonal products and as shoppers spent more to remodel their homes.

The No. 1 U.S. home improvement chain also raised its earnings and revenue forecasts for the year.

Consumers are investing in their homes, even as higher mortgage rates and rising real estate prices have hurt home sales this summer. Sales of new U.S. single-family homes fell to an eight-month low in June and data for the prior month was revised sharply lower, the latest indication the housing market was slowing down.

“The (company’s) sales strength is likely to garner the most attention as we sense there had been some fear recently that the overall macro picture had been slowing down,” Stifel analyst John Baugh said in a note.

Home Depot Chief Executive Officer Craig Menear sought to allay those concerns, saying the U.S. economy and the factors that drive home-improvement spending remained strong. “We feel very positive about the strength of the home improvement sector and the customers’ willingness to spend.”

Homeowners are spending more as prices appreciate and they view their homes as an investment and not an expense, Menear said. Home equity values have increased over 120 percent since 2011 in the United States, about $73,000 per owner in terms of equity, he said. He did not cite the source of the data.

Second-quarter sales rebounded from the first quarter when cooler-than-usual weather in some parts of the United States hurt demand for spring season products.

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Menear said a majority of seasonal sales that were lost in the first quarter were recovered in the second. Lumber, indoor and outdoor garden products, lawn-mowers, patio furniture, ceiling fans, interior and exterior paint all posted strong growth.

The retailer said it is witnessing inflationary pressures in the form of rising raw material and transportation costs. The tariffs on Canadian lumber and washing machines imported from China recently imposed by the Trump administration have been manageable, it said, increasing by the low single-digit percentages the cost of goods sold.

Home Depot raised its full-year earnings forecast to $9.42 per share from $9.31. It also expects comparable sales growth of about 5.3 percent, up from a previous forecast of 5 percent, and total sales growth of about 7 percent, from 6.7 percent earlier.

Customer transactions rose 3.1 percent in the second quarter ended July 29.

Sales at stores open for more than a year climbed 8 percent, beating the average analyst estimate of a rise of 6.65 percent, according to Thomson Reuters I/B/E/S. Online sales grew approximately 26 percent from the second quarter of 2017.

Net earnings increased to $3.5 billion, or $3.05 per share, in the quarter, from $2.7 billion, or $2.25, a year earlier. Analysts expected $2.84 per share.

Net sales rose 8.4 percent to $30.5 billion, beating expectations of $30.03 billion.

Home Depot shares, which have risen 25 percent in the past 12 months, added 0.4 percent to $194.94.