Home Depot and Lowe's Bled by Rising Mortgage Rates and Stalled Housing Market
Home improvement retailers Home Depot and Lowe's are facing a tough spot as mortgage rates continue to rise. The 10-year Treasury yield is near its highest level since 2007, at around 5.19%, causing the 30-year mortgage rate to climb to 6.67%. Existing home sales have also slowed down, reaching a 3.98 million annual pace in August, the weakest reading since June.
As a result, both Home Depot and Lowe's are seeing their stock prices fall. Home Depot has dropped roughly 31% from its late 2025 high of $426.75, while Lowe's is down around 35% off its February peak. The companies blame the housing market downturn for their struggles, citing financing costs and stalled moving activity as major factors.
Lowe's had a particularly rough August, with comparable sales rising just 0.2%. The company trimmed its full-year outlook, cutting adjusted earnings guidance to $12.25 per share from a range of $12.25 to $12.75. Home Depot, on the other hand, saw comparable sales rise 1.7% in the second quarter.
The key difference between the two companies is their focus on different areas of the market. Lowe's has a sharper focus on productivity and pro-market share gains, which seems to be traveling better through a sluggish stretch than Home Depot's larger store base.