Home Depot Sees Steady Sales Amid Housing Market Challenges

Home Depot customers are maintaining their spending on home improvements, particularly on smaller projects, as they navigate rising mortgage rates and increasing home prices.

In its latest report, the home improvement giant revealed a 5.7% sales increase in the second quarter compared to last year, amounting to $47.9 billion, with comparable sales climbing 1.7%. Sales in the U.S. specifically rose by 1.3%, attributed to consumers leaning towards smaller, more manageable home projects rather than larger renovations.

“Our second quarter results surpassed our expectations. We noticed broad demand across our businesses as customers focused on smaller projects,” shared Home Depot’s Chief Financial Officer Richard McPhail.

Interestingly, shoppers are spending a bit more each time they check out. The average transaction value at Home Depot increased by 2.8% year-over-year, reaching $92.50, although the overall customer transaction value did see a slight drop of 1%.

This trend of spending comes amid a housing market that is constrained by affordability obstacles, potentially hampering demand for significant renovations that typically require financing.

In July, existing home sales dropped 1.7% from the previous month to an annualized rate of 4.06 million, as reported by the National Association of Realtors. Simultaneously, the median price for existing homes climbed 2% year-over-year to $434,100.

Interest rates are also on the rise. As of August 13, the average interest rate for a 30-year fixed mortgage stood at 6.67%, compared to 6.58% a year prior, according to Freddie Mac.

While homeowners are still investing in small-scale projects, high borrowing costs and elevated home prices could complicate bigger purchases and major renovations.

Home Depot’s net income for the second quarter amounted to $4.8 billion, which translates to $4.79 per diluted share, with adjusted earnings at $4.92 per share.

Despite the mixed signals from the housing market, Home Depot remains optimistic, reiterating its forecast for 2026. The retailer anticipates total sales growth of about 2.5% to 4.5%, with like-for-like sales expected to be flat to 2%. This outlook aligns with its previously announced projections for the fiscal year 2026.