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Home Depot’s business is stuck. That’s a bad sign for the economy

<i>David Paul Morris/Bloomberg/Getty Images via CNN Newsource</i><br/>A shopper inside a Home Depot store in Roseville

By CNN Newsource

Published November 18, 2025 6:00 am

By Nathaniel Meyersohn, CNN

New York (CNN) — The housing market is frozen, and consumers are nervous about the economy. That’s a bad recipe for Home Depot.

The bellwether for US consumers and the housing market said Tuesday that its sales at US stores open for at least one year rose only 0.2% last quarter. It also cut its profit forecast for the year.

Home Depot attributed the slowdown to consumers cutting back on remodeling projects and big home upgrades. Mortgage rates have been stuck between 6% and 7% in recent years, leading fewer people to buy and sell their homes.

“We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand,” Home Depot CEO Ted Decker said in a statement.

The company also said that fewer major storms and extreme weather events last quarter led to weaker customer demand for roofing materials, backup power generators and plywood.

Home Depot’s (HD) stock slipped 3% during pre-market trading Tuesday. Shares have dropped roughly 8% this year.

The company has also been grappling with President Donald Trump’s tariffs on imported goods. Nearly half of Home Depot’s inventory comes from suppliers outside the United States.

In August, finance chief Richard McPhail said Home Depot would have to raise some prices as a result of the Trump administration’s taxes on imports.

“For some imported goods, tariff rates are significantly higher today than they were at this time last quarter,” he said in an interview with the Wall Street Journal. “So as you would expect, there will be modest price movement in some categories, but it won’t be broad based.”