Home Depot's Weak Forecast Highlights Strains In US Housing Market

Home Depot's recent earnings report has raised alarms about more than a retail slowdown, signalling stress in the U.S. housing market and financial pressures on homeowners and potential buyers alike.

The home improvement giant posted a 0.2% gain in same-store sales for the quarter and lowered its full-year profit forecast, citing persistent challenges in housing and consumer spending. Analysts say the numbers reflect broader concerns about affordability and economic uncertainty in the nation's housing sector.

Rising mortgage rates, higher building costs, and inflationary pressures are keeping many prospective homebuyers on the sidelines. Homeowners are also postponing major remodelling projects, opting for smaller, incremental fixes that don't require financing or risk exposure to economic volatility.

The report also illustrates a divide in demand: while retail customers pull back, professional contractors continue to drive sales, indicating a possible strategic shift for Home Depot toward trade-focused revenue.

Housing industry observers say the Home Depot results mirror a slowdown across U.S. homebuilding and renovation. New-home orders have softened, particularly in the entry-level segment, as affordability remains a challenge for first-time buyers. Analysts warn that a prolonged slump in housing activity could have ripple effects across construction, materials, and local economies that rely on residential development.

For ordinary Americans, the numbers carry personal implications. Delayed home improvements, stalled moves, and rising costs highlight the uncertainty facing households trying to maintain or upgrade their living spaces. The report serves as a reminder that behind corporate forecasts are real families weighing decisions about where and how to live.

Economists caution that while pockets of strength remain, such as continued demand from contractors and higher-end homebuyers, the overall message is clear: the housing market is entering a cautious phase, and consumers may need to adjust expectations about affordability and timing.

The Home Depot forecast offers a window into broader economic trends, suggesting that the health of U.S. housing and consumer confidence remain tightly linked, with even minor market fluctuations reverberating widely.

Immigration enforcement has made Home Depot a ghost facility.

Fewer hispanics hanging around Home Depot here, in San Mateo County just outside SF. Used to bug me when I'm loading up my truck with purchased goods like lumber and concrete, and they run up begging for work or to load my truck. Bugs me because they don't take no for an answer, while speaking Spanish. So I would give them $5 for helping but tell them no work in Spanish. Home Depot workers will help load for free, their job.

I've been buying a lot of materials monthly at Home Depot, doesn't seem to be any slowdown here, lots of people doing home improvements. Also buy at Lowes and other stores to get goods, same thing, lots of buyers.

Of course, this will exacerbate inflation, but the risk of recession is growing.

Been saying this for over a year now, but American's are largely tapped out. Not the EBT crowd...they seem to always do fine with their free money. But the middle class that really drives the economy. It's been a scenario where the economy has been just able to stay on the right side of things.

From car loans (late payments for subprime car loans last saw this level was 1993, repos are expected to hit 3 million this year, the highest rate since 2009; with even prime borrowers making late payments, and don't forget the two subprime lenders declaring bankruptcy), to the lapse in the housing market. The period of increased gas and food prices added further fuel to the fire.

Some will point to the rising GDP seen this year, but 99.9% of that increase was associated with data centers for the first half of the year. At some point, there will be enough data centers, and then what?

The October ISM Manufacturing PMI reported: "Economic activity in the manufacturing sector contracted in October for the eighth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest ISM® Manufacturing PMI® Report."

It also reports:
New Orders Contracting
Production Contracting
Employment Contracting
Supplier Deliveries Slowing
Raw Materials Inventories Contracting
Customers’ Inventories Too Low
Prices Increasing
Exports and Imports Contracting

If inventories are contracting, one might argue that it's just a normalization of stock levels, but that doesn't necessarily mean that new orders need to decrease, as larger manufacturers often issue blanket purchase orders for periods in excess of six (6) months. But if that practice is stopping, along with contracting imports, then it could be indicative of a global slowdown. And some parts of the globe haven't been faring all that well to start with.

So, without buyers, who does a manufacturer sell to? And if manufacturers don't have their sales, they also won't buy raw materials. It's a vicious cycle.

Democrats weren't going to discuss problems during Biden's time, especially the last year, due to the election. I also don't believe Republicans want to discuss the problem that is going to be ever-increasing, and the $2,000 kicker isn't going to help much (plus it stinks of trying to buy votes, and I don't care who does it). While I agreed with tariffs, there was too much volatility with how they were handled, and manufacturers were unable to adjust and plan accordingly. Raising rates because of a hissy fit is no strategy.

There's a correction coming, and the longer it gets kicked down the road, the more likely it is to make 2009 look like a dry run.

“” the overall message is clear: the housing market is entering a cautious phase””

The housing market needs to enter the burn to the ground phase.

3 Br brick - 2 car garage price has more than DOUBLED here in Dallas.

I have one on a corner lot 2 blocks from my house listing at $741,000.00. That puts it at about $400.00 sf.

No pool, not much of a yard front or back.

$400.00 / sf.

And the realtors around here have horns and fangs.

They truly believe they “deserve” the 15 to 20 grand to shuffle the paperwork, AFTER YOU fill out all the computer forms for three (3) hours.

When it crashes they will be screaming the world is ending.

Nope, just their phoney world.

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