Home Depot, Lowe’s Slide to Yearly Lows as Housing Stalls
Home Depot and Lowe’s shares reached 52-week lows as high mortgage rates and a frozen housing market weighed on home improvement demand. Both retailers beat earnings estimates but faced deferred renovation projects, tariff-related material costs, and cautious guidance. Analysts still had Moderate Buy ratings on both, with price targets suggesting about 27% upside for Home Depot and 37% for Lowe’s.
Home Depot and Lowe’s fell to their lowest prices in a year last week despite both exceeding profit forecasts. A sluggish property market, with 30-year fixed mortgage rates at their highest since November 2023, has discouraged moves and major renovations. Sellers are listing less often, and buyers are not taking on big projects, while owners with cheap existing loans hold back.
Emergency repairs continue, but discretionary upgrades are being postponed. Tariff-related material costs and rising borrowing costs for HELOCs, cards, and personal loans add pressure. Analysts still rate both Moderate Buy; targets suggest about 27% upside for Home Depot and 37% for Lowe’s. Together they control roughly 80% of the retail market for home upgrades.
A long stretch of weak housing activity could keep renovation demand muted, affecting homeowners, sellers, contractors, and retail employees connected to home improvement. Consumers may delay large projects or focus on urgent repairs, while higher material and borrowing costs could squeeze budgets. If housing activity picks up, spending might recover, potentially helping retailers and investors anticipating a turnaround. The timing, though, remains uncertain.