Home Depot Reveals Bleak Future Citing ‘Uncertainty in the Economy’

The Home Depot is a staple in most communities: You know you can get pretty much anything you would ever need for your home, property or business at the big box home repair store.

But like other lanes of retail, home improvement is seeing less traffic lately, and the rest of the year isn't looking bright for Home Depot's earnings.

Sign of the Times: Home Depot Reports Reduced Profits

Per CNBC, during a Q2 earnings call the Home Depot CFO Richard McPhail said that homeowners are taking a pause on big projects due to a "sense of greater uncertainty in the economy."

Remodeling is costly, and it seems unlikely people will be taking on home repair to wrap 2024 thanks to inflation and high interest rates of home mortgages.

"Pros tell us that, for the first time, their customers aren’t just deferring because of higher financing costs. They’re deferring because of a sense of greater uncertainty in the economy."

In other words, not only are Home Depot shoppers dealing with higher interest rates, home buyers now are so uncertain with the economy in the United States that they are stashing away any extra cash that they have, as opposed to updating parts of their home.

The Home Depot is especially struggling to sell flooring and lighting. The CFO states that those are the usual big sellers, but have been less so this year.

It's not just housing interest rates — it's also people not wanting to take out loans from the bank for home projects due to those interest rates being higher, as well. People seem to be waiting on rates to drop before taking on any significant projects.