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Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →U.S. housing starts, mortgage rates, and remodeling activity help frame demand for home-improvement retailers, but none predicts a stock’s direction on its own. They measure different parts of the housing market, move on different schedules, and reach retailers through different customer groups. Home Depot and Lowe’s fiscal Q2 2026 results illustrate the difference: both reported positive comparable sales, but their stated demand drivers were not identical.
What the three indicators measure
These indicators are useful together only if you keep their scope and timing distinct. Housing starts track new construction; mortgage rates are a weekly borrowing-cost snapshot; and the remodeling figure below is a forecast of spending growth on existing homes.
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| Indicator | Latest cited reading | What it can signal | What it does not establish |
|---|---|---|---|
| Housing starts | 1,275,000 privately owned starts at a seasonally adjusted annual rate in August 2026; down 2.6% from revised July and 1.2% from August 2025. U.S. Census Bureau and HUD, August 2026 release. | New residential construction activity, including single-family and multifamily units. | Actual retailer sales, remodeling demand, or the future performance of a particular stock. |
| 30-year fixed mortgage rate | 7.28% weekly average on October 1, 2026; Freddie Mac’s Primary Mortgage Market Survey. | A snapshot of mortgage rates reported from loan applications submitted through Loan Product Advisor by lenders across the country. | The rate every borrower receives, or a complete measure of housing affordability. |
| Remodeling and repair spending | 0.5% year-over-year growth expected for 2027 Q2. Harvard University’s Joint Center for Housing Studies, July 23, 2026 forecast. | The expected pace of spending growth on improvement and repair. | A fall in spending: the forecast is for slow positive growth, not contraction. |
How housing starts reach home-improvement retailers
A start is counted when excavation begins for a building’s footings or foundation, according to the Census Bureau. The monthly series is reported at a seasonally adjusted annual rate: it annualizes the pace implied by that month’s activity rather than counting that many homes as completed during the month. The August 2026 estimate included 918,000 single-family starts at a seasonally adjusted annual rate.
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More construction can plausibly lift demand for materials, fixtures, appliances, and finishing products as projects advance. But starts are an early-stage activity measure, not a register of purchases from Home Depot or Lowe’s. The lag between excavation and later construction needs, the mix of single-family and multifamily building, and where builders source supplies all affect how much of that activity a retailer captures. Census estimates are also subject to revision.
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August’s starts reading was below both revised July 2026 and August 2025. That is a weaker year-over-year new-construction signal, not proof that retail sales must decline: it says nothing directly about repair work on existing homes or each retailer’s share of builder spending.
How mortgage rates can change housing-related demand
Freddie Mac’s weekly 30-year fixed-rate average moved from 6.76% on September 10 to 7.03% on September 24 and 7.28% on October 1, 2026. Those dated observations show why a mortgage-rate reading should be treated as a snapshot rather than a stable condition. The survey is based on rates collected from loan applications submitted through Loan Product Advisor; an individual borrower’s offer can differ.
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Higher borrowing costs can make home purchases less affordable and reduce housing turnover. If fewer households move, there may be fewer move-related projects such as furnishing, repainting, or updating a recently purchased home. A countervailing possibility is that some owners stay put longer and repair or improve the home they already have. These are plausible channels, not causal results established by the cited figures; the net effect depends on household choices, project types, and timing.
What the remodeling outlook adds
Remodeling is a separate demand channel from new construction. Harvard’s Joint Center for Housing Studies forecast on July 23, 2026 that annual growth in home-improvement and repair spending would slow to 0.5% in 2027 Q2. That means the Center expected spending to keep growing slowly, not to fall. The forecast is forward-looking and does not guarantee what spending or retailer sales will actually be.
The Center’s Rachel Bogardus Drew said, “Growth in remodeling permitting and retail spending on building products have flattened recently, suggesting that renovation activity is cooling.” A cooling rate of growth can matter to retailers even if total spending remains above the prior year: sales can still rise, but at a slower pace. That outlook is distinct from a monthly starts report and should not be read as a measure of current new-home construction.
What Home Depot and Lowe’s reported
The retailers’ fiscal Q2 2026 results show how customer mix and execution can complicate a simple macro story. Comparable sales are a retailer-specific measure of sales at comparable locations; they do not isolate the effect of starts, rates, or remodeling.
| Retailer and period | Reported result | Demand details disclosed by the company |
|---|---|---|
| The Home Depot, fiscal Q2 2026 | Sales of $47.9 billion, up 5.7% year over year; comparable sales up 1.7%, with U.S. comparable sales up 1.3%. The company reaffirmed fiscal 2026 guidance. | CFO Richard McPhail cited broad-based demand and smaller projects: “Our second quarter results exceeded our expectations. We saw broad based demand across the business as customers continued to engage in smaller projects.” |
| Lowe’s, fiscal Q2 2026 | Comparable sales up 0.2%. | The company attributed growth to Pro and home-services performance and a 15.7% increase in online sales, partly offset by persistent DIY macro pressures. |
These disclosures point to different mixes of activity: smaller projects at Home Depot, and Pro, services, online growth, and DIY pressure at Lowe’s. They are company explanations for one quarter, not evidence that any single housing indicator caused the reported results or that either retailer will repeat them.
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Why these indicators do not mechanically predict stock prices
A retailer’s share price reflects investors’ expectations for future results, not just the latest housing statistic or quarter. An indicator may already be incorporated into expectations before it is released. The stock can also respond to margins, product mix, costs, tariffs, competition, acquisitions, company guidance, and valuation. Home Depot’s fiscal Q2 release identifies housing and credit markets, rates, tariffs, competition, costs, and guidance among relevant risks and forward-looking factors.
The cited Census, Freddie Mac, Harvard, Home Depot, and Lowe’s sources do not estimate how a given change in starts, mortgage rates, or remodeling spending translates into a percentage move in either stock. They also do not provide a regression, event study, or stock-return sensitivity. It would therefore be unsupported to turn the August starts decline, the October 1 mortgage average, or the 2027 remodeling forecast into a target price or a directional stock call.
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A practical way to read future updates
- Match the indicator to the demand channel. Use starts for new construction, mortgage rates for financing conditions and possible housing turnover, and remodeling outlooks for existing-home projects.
- Keep the cadence and horizon attached to the number. Compare weekly mortgage observations with other dated weekly observations, monthly starts with their revisions and prior-year readings, and remodeling forecasts with their stated forecast period.
- Check the retailer’s own mix and guidance. Look for disclosures on DIY, Pro, services, online sales, project size, comparable sales, margins, and guidance rather than assuming both retailers have identical exposure.
- Separate business evidence from stock valuation. Even a clear demand trend does not show what investors expected, what is already priced in, or how costs and margins will affect earnings.
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