Home Depot Shares Tumble 2.5-3% on Stagnant Interest Rates, Housing Slowdown

Home Depot's stock fell 2.5-3% following the Federal Reserve's decision to hold interest rates steady, which has had a ripple effect on the home improvement sector . The decision, made on June 17, led to higher mortgage rates (30-year fixed at 6.47%), which has resulted in reduced housing turnover and consumer spending on home improvement projects.

Although lower home prices could lead to an increase in existing home sales and renovation projects benefiting Home Depot, the retailers still forecast a weak year ahead, with same-store sales growth expected to be just 1% for fiscal 2026, as some Fed officials expect potential rate hikes ahead .

This news comes at a time when the housing market is expected to slow down, with Lennar, a leading homebuilder, reporting a 9-year low in average home prices ($371,000) in a move to boost demand in an effort to make homes more affordable .

Despite the current economic concerns, Home Depot's stock remains attractive, and its long-term prospects look promising.