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Mortgage rates can affect Home Depot by changing how affordable it is to buy a home and how many people choose to move. Fewer home sales and moves can mean fewer purchases tied to preparing, repairing or renovating a home around a transaction. Home Depot’s management has described that connection, and it has also said a persistently high-rate environment pressured broader home-improvement demand.
That operating link is plausible and acknowledged by the company; it is not proof that mortgage rates alone caused a change in Home Depot’s sales or share price. Sales also reflect weather, consumer uncertainty, housing conditions, project mix and fiscal-calendar effects. The available company commentary does not quantify a mortgage-rate sensitivity for sales or HD stock returns.
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How mortgage rates can affect Home Depot
The connection runs through housing affordability and turnover. A mortgage is a major part of the cost of buying a home. When financing becomes less affordable, some prospective buyers may delay a purchase, while existing owners may be less inclined to sell if moving means taking on a more expensive loan. Fewer transactions can then reduce demand for work and purchases associated with moving.
That second step matters to a home-improvement retailer. Buyers and sellers may undertake repairs, updates or larger projects before or after a move. If fewer households move, there may be fewer of those transaction-related projects. The Home Depot’s chief financial officer, Richard McPhail, said the mortgage-rate environment and higher home prices had affected affordability. He also said housing turnover had remained at historical lows since 2023, significantly reducing demand for projects and other purchases associated with buying and selling a home. The company’s Q4 fiscal 2025 earnings-call transcript records those comments.
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Higher rates may also make households more cautious about financing large renovations, particularly if a project depends on borrowing. That is a reasonable channel, but the cited company material does not measure how much Home Depot sales change for each percentage-point move in mortgage rates. Nor does it show that every homeowner postpones work: maintenance and smaller projects can continue even when moving-related demand is weak.
Why the effect is uneven across projects
Mortgage rates do not act as an on-off switch for home improvement. Their influence is most direct when a household’s decision depends on buying, selling or financing a home project. Other purchases can be driven by a home’s age, wear and tear, weather damage, household needs or a homeowner’s budget. As a result, different parts of demand can move in different directions at the same time.
| Demand channel | How mortgage rates can matter | What the evidence establishes |
|---|---|---|
| Buying- and selling-related work | Reduced affordability or a reluctance to move can mean fewer projects and purchases around home transactions. | Home Depot’s CFO linked low housing turnover since 2023 to reduced demand for purchases associated with buying and selling a home. Company earnings-call transcript. |
| Large discretionary projects | Households may defer a major project if costs, financing or economic uncertainty make it harder to justify. | Management cited a persistent high-interest-rate environment as pressure on broader home-improvement demand; it did not quantify the effect on any one project category. 2026 proxy statement. |
| Maintenance and smaller jobs | These may be less dependent on a home sale or a new mortgage, so demand can hold up even if turnover is low. | In fiscal 2026’s second quarter, Home Depot reported that customers continued to engage in smaller projects while sales rose. That observation does not isolate the mortgage-rate effect. Fiscal 2026 second-quarter results. |
The table describes channels, not a forecast. The company’s reported sales combine these activities with many other influences, and it does not provide a rate-specific breakdown that would let an investor assign a precise share of sales to mortgage conditions.
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What Home Depot’s recent results show
Fiscal 2025 provides a useful example of why sales growth should not be read as evidence that rates did not matter. Home Depot reported higher net sales and comparable sales for the year, while net earnings declined. Management separately described ongoing pressure in housing and a high-rate environment. Those facts can coexist: a business may grow sales while operating under a headwind, and the annual result does not reveal what sales would have been under different mortgage conditions.
| Measure | Fiscal 2025 result | How to interpret it |
|---|---|---|
| Net sales | $164.7 billion, up 3.2% year over year | Total reported sales increased. Fiscal 2024 included an extra week, so the raw annual comparison is not like-for-like. |
| Comparable sales | Up 0.3% | Comparable sales provide a same-store-oriented measure; they are not a direct measure of mortgage-rate sensitivity. |
| U.S. comparable sales | Up 0.5% | This is the U.S. comparable-sales figure, not the company-wide rate. |
| Net earnings | $14.2 billion, down 4.4% | Sales growth and earnings growth are different outcomes. The earnings decline does not, by itself, identify mortgage rates as the cause. |
These figures are from Home Depot’s February 24, 2026 fiscal 2025 results release and its 2026 proxy statement. The proxy states that fiscal 2025 had 52 weeks and fiscal 2024 had 53. The additional week contributed approximately $2.5 billion in fiscal 2024 sales, according to the company. That makes the unadjusted reported sales comparison especially important to qualify; it should not be treated as a clean measure of underlying demand acceleration.
What management said about the business outlook
In discussing fiscal 2025 fourth-quarter results, CEO Ted Decker said results were largely in line with expectations, reflecting a lack of storm activity in the third quarter, ongoing consumer uncertainty and pressure in housing. He added that, adjusting for storms, underlying demand was relatively stable through the year. This is management’s characterization, not an independent estimate of the effect of rates or a claim that all demand categories were stable. The earnings release contains the statement.
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The company’s 2026 proxy describes a “persisting high interest rate environment” as one of the macroeconomic factors continuing to pressure broader home-improvement demand. That supports the conclusion that management viewed rates as a headwind, but it does not tell readers how much revenue or profit would have differed if rates had been lower. Housing and credit markets, consumer credit, broader economic conditions and other business risks also appear in Home Depot’s filings. The fiscal 2024 Form 10-K provides the company’s broader risk context.
Fiscal 2026 guidance is not a rate forecast
For fiscal 2026, Home Depot forecast total sales growth of approximately 2.5% to 4.5%, comparable-sales growth from roughly flat to 2.0%, and diluted earnings per share growth of roughly flat to 4.0% from fiscal 2025. These are company forecasts, not guaranteed outcomes. They are also not an estimate of what a particular mortgage-rate change would do to sales or earnings. The ranges appear in the fiscal 2025 results release.
Later results can offer context but still do not isolate rates. Home Depot reported fiscal 2026 second-quarter sales of $47.9 billion, up 5.7% year over year, and said customers continued to engage in smaller projects. The quarter’s sales growth shows that business activity can rise while the rate environment remains relevant; without a counterfactual or a quantified rate analysis, it cannot establish how much sales would have grown in a different mortgage market. The second-quarter results provide the reported figure and management commentary.
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What Home Depot’s mortgage figures do—and do not—say
In investor conference materials dated December 2025, Home Depot said more than 70% of outstanding mortgages were below 5% and gave a 4.3% average effective mortgage rate. These are dated figures from the company’s presentation, not a current mortgage-rate quote and not a measure of the rate offered to a new borrower today. They help explain why an owner with an older, lower-rate mortgage might be reluctant to move if a new loan would cost more, but they do not quantify how many people stayed put for that reason or the resulting impact on Home Depot. The December 2025 investor conference materials are the source.
Mortgage rates also should not be confused with Federal Reserve financial-account data. The Federal Reserve’s Z.1 release includes mortgage-related balance-sheet information through 2026:Q2, but those financial-account flows are not mortgage-rate observations and do not measure Home Depot demand. The September 11, 2026 Z.1 release is useful for financial accounts, not as a substitute for a dedicated mortgage-rate series.
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They can influence the business outlook investors consider, but the available evidence does not establish a standalone causal effect on HD shares. A plausible chain is: rates affect affordability and turnover; turnover may affect home-improvement demand; investors may adjust expectations about future revenue, earnings or growth. Each link has uncertainty. Stock prices also respond to company results, expectations, market-wide moves and other information, so a share-price change occurring alongside a rate move is not proof that one caused the other.
It is also important to separate expectations from realized results. Investors may buy shares in anticipation of lower rates or a future housing recovery before Home Depot reports stronger sales. Conversely, a company can post sales growth while its shares fall if investors expected more. Neither pattern alone demonstrates a direct rate effect.
How to make a meaningful stock comparison
A claim that mortgage rates affected HD’s stock performance needs a defined period and a return calculation, rather than a comparison of two undated lines on a chart. Home Depot provides a historical stock lookup through its investor relations site. A careful comparison should make the following choices explicit:
- Set the dates. State the start and end dates for both the stock-return window and the mortgage-rate observation window. Do not compare a rate change over one period with a stock move over another.
- Specify the return measure. Say whether the HD figure is price return or total return including dividends. A share-price-only calculation omits dividends.
- Choose a benchmark. Compare HD with a suitable broad-market benchmark over the same dates to distinguish company-specific movement from a market-wide rise or fall.
- Use an appropriate mortgage-rate series. The company materials cited here do not provide a current rate series or perform this comparison. Use a dedicated mortgage-rate observation source if adding numerical rates.
- Describe the result as association unless causality is tested. Even matched dates and a benchmark show co-movement, not proof that rates caused a particular stock return.
The source material reviewed here does not calculate HD’s returns for a selected period or match them with mortgage-rate changes. Accordingly, it supports an explanation of the business mechanism, not a numerical claim about how much the stock rises or falls when mortgage rates move.
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To judge whether housing conditions appear to be affecting Home Depot, assess several indicators together instead of treating mortgage rates as a single-answer predictor. This framework keeps reported company facts separate from the interpretation investors may draw from them.
- Housing affordability and turnover: Look for company commentary on affordability, home sales or housing turnover. A rate move matters to the retailer through household decisions, not simply because a quoted rate changed.
- Project mix: Distinguish purchases connected to a move or a major discretionary project from maintenance and smaller jobs. Resilience in the latter does not disprove weakness in the former.
- Comparable sales and transactions: Read comparable-sales results alongside transaction counts and average ticket when the company reports them. Sales can change because customers make more transactions, spend more per transaction, or both.
- Weather and unusual events: Storm-related demand can raise sales, while a lack of storms can remove that source of activity. Decker specifically cited storm activity in explaining fiscal 2025 quarterly results.
- Calendar comparability: Check the number of weeks in each fiscal year before comparing annual sales. The extra fiscal 2024 week makes raw comparisons with fiscal 2025 less straightforward.
- Earnings and guidance: Sales growth does not necessarily mean earnings growth, and guidance ranges are forecasts rather than observed results or rate-sensitivity estimates.
- Stock returns: For an investment claim, define the dates, account for dividends, and compare with a market benchmark. Keep that return analysis distinct from the company’s operating commentary.
This approach avoids two common errors: assuming that every sales change is caused by mortgage rates, and assuming that a rate headwind must produce falling sales or a falling stock price in every period. The company’s comments establish that rates and low turnover can weigh on demand; the size and timing of any effect depend on the mix of projects and the other forces shaping results.
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