What Home Depot’s Q4 earnings say about the 2025 housing market

“While there are signs that the home-improvement market is on the way towards normalization, uncertainty still remains,” Chief Financial Officer Richard McPhail said on a call with analysts. In the near term, the company isn’t expecting to see meaningful changes to interest rates, housing turnover or the macroeconomic environment.

Executives didn’t discuss the prospect of tariffs during the call, but did say they don’t see a big upward swing in the housing market. Rate cuts look increasingly less likely as inflation remains sticky.

“We’ve likely reached the bottom of housing turnover at about 3% of units. But we’re not expecting a big rebound, nor significant increases in new housing starts,” said Home Depot CEO and President Ted Decker.

“Our fourth-quarter results exceeded our expectations as we saw greater engagement in home improvement spend, despite ongoing pressure on large remodeling projects.”

Decker noted that comparable sales grew 0.8% after eight consecutive quarters of negative growth. Sales of appliances and power tools were strong, though remodeling projects continue to be slow.

The retailer should receive a boost from wildfire and hurricane-related disaster recovery-related projects.

Home Depot is also shifting focus to larger, more complex projects with professionals, rather than DIY-customers. It paid $18.25 billion last year to acquire SRS Distribution, which sells tools to professionals in the roofing, pool and landscaping businesses.

Though inventory is up meaningfully over last year and home price appreciation should decline, forecasters don’t expect a surge of home sales in the spring.