Home Depot CFO Warns of Softening Demand, Frozen Housing Market

Macroeconomic uncertainty and affordability pressures weigh on big-ticket home improvement projects

Apr. 9, 2026 at 4:04pm

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A high-end, photorealistic studio still-life photograph featuring a collection of premium, polished hardware tools and building materials arranged elegantly on a clean, monochromatic seamless background. The objects symbolize the core products and services of the home improvement industry, using sharp, dramatic studio lighting and deep shadows to represent the abstract challenges of the current housing and consumer confidence environment.As consumer confidence wavers and housing activity stagnates, Home Depot faces headwinds in its core home improvement business.Atlanta Today

Home Depot's Chief Financial Officer Richard McPhail said the home improvement retailer has seen softening demand as consumer confidence has drifted lower amid economic uncertainty, inflation concerns, geopolitical events, and fears of job loss. McPhail noted that private residential fixed investment has turned negative and existing home sales remain unusually depressed, with the housing market 'frozen' due to affordability pressures from rising mortgage rates.

Why it matters

Home Depot's warning about softening demand and a 'frozen' housing market reflects broader macroeconomic challenges facing the home improvement industry. As a bellwether for consumer spending on home projects, Home Depot's outlook provides insight into the health of the housing and construction sectors, which have significant ripple effects across the economy.

The details

Speaking at JPMorgan's Retail Round Up Forum, McPhail said customers cited uncertainty as 'the largest factor keeping them back from engaging in larger home improvement projects,' even as Home Depot posted positive comparable sales in the U.S. for the fifth consecutive quarter in Q4 2025. He pointed to private residential fixed investment turning negative in 2025 and existing home sales remaining at unusually depressed levels of around 3% of all homes, well below the typical 4-5% range. McPhail attributed the housing slowdown largely to affordability pressures following the rapid rise in 30-year mortgage rates from the 'high 2% area to the low 7% area' over the past 12-18 months.

  • In 2024, private residential fixed investment decelerated while still remaining positive year-over-year.
  • In 2025, private residential fixed investment turned negative year-over-year and continued to weaken.
  • For about the past three years, the housing market has seen existing home sales and turnover remain at around 3% of all homes, which McPhail called 'unprecedented in the past 50 years'.

The players

Richard McPhail

Chief Financial Officer of Home Depot.

Home Depot

A leading home improvement retailer that operates large-format stores and an integrated online platform offering a broad range of products and services.

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What they’re saying

“The customer, particularly the homeowner, their financial position is solid and frankly better than it's ever been pre-COVID.”

— Richard McPhail, Chief Financial Officer

“Typically we're somewhere between 4%-5% of all homes existing in the U.S. changing hands. We're at 3%, and that market has held at that level for about three years, a duration I would call unprecedented in the past 50 years.”

— Richard McPhail, Chief Financial Officer

What’s next

Home Depot expects to outperform the overall market in 2026 as it continues to invest in its Pro customer strategy and AI-enabled capabilities to improve store execution and customer service.

The takeaway

Home Depot's warning about softening demand and a 'frozen' housing market underscores the broader macroeconomic challenges facing the home improvement industry, with uncertainty, inflation, and affordability pressures weighing on consumer willingness to undertake major home projects. However, the company remains focused on deepening its relationships with professional contractors and leveraging technology to drive operational efficiencies.