Slow Sales at Home Depot Signal Warning for Housing

The very strong housing market might be slowing down. Home Depot recently reported quarterly sales and the CEO noted, “a slow start to the spring selling season.”

For the first time in two years, Home Depot did not top analysts’ estimates. Shares of Home Depot (HD) fell nearly 2 percent on May 23. Rival company, Lowe’s (LOW), slipped 1 percent.

Sales at Home Depot stores opened at least a year, commonly referred to as same-store sales, rose 4.2 percent in the quarter. However, analysts expected a 5.4 percent increase.

One of the problems for Home Depot could be rising mortgage rates. The U.S. Treasury bond, a benchmark for mortgage rates, is at its highest level since 2011.

Climbing mortgage rates make it more difficult for people to buy houses. For companies such as Home Depot, this is not good news.

Wall Street is already showing concerns that the housing boom may be coming to an end. Shares of big builders are also down this year, including KB Home (KBH), Lennar (LEN), D.R. Horton (DHI), and Toll Brothers (TOL).

The weather was another factor in Home Depot’s less-than-satisfactory quarter. Companies such as Home Depot sell building products for outdoor construction projects. As a result, poor weather can adversely affect sales for these businesses.

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In this issue:

Why Buying a Home in 2018 Could be a Smart Move

Five Fastest Selling Cities for Residential Real Estate

Almost Half of Freddie Mac Mortgages in Q1 Borrowed by First-Time Home Buyers

Slow Sales at Home Depot Signal Warning for Housing

Homeowners Gain $1 Trillion in Home Equity

Homeownership Trends Upward as Renter Households Decline

Mortgage Rates Reach Seven-Year High

New Home Prices Decline to 12-Month Low

The Best Cities for Housing Market Purchasing Power

Helping Clients Celebrate Their New Home Purchase on Social Media

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