Home Depot Sounds Alarm on 'Frozen' Housing Market

The housing market has taken a hit, and Home Depot is feeling it. According to a new report from the Census Bureau, housing starts dropped by 13.5% year-over-year in July.

Home Depot reported okay earnings on Tuesday, but CEO worries about the 'frozen' housing market. The company has been intentionally setting its expectations low and consistently outperforming them.

Jacqueline Katz, an equity analyst at Morningstar, believes that there is a lack of confidence in demand. Pending home sales are down, housing starts are down, and mortgage rates are up.

David Zhang, a finance professor at Rice University, points out that 20% of mortgages have interest rates below 3%, and half have rates below 4%. Eventually, people will give up these low rates, but in the short term, it's tough to see things improving.