Home Depot Sees Fewer Large Purchases From Customers, Citing ‘Macro Uncertainty’ Over High Interest Rates

The Home Depot is struggling to reverse “concerning customer behavior,” according to TheStreet reporter Patricia Battle — namely, a decline in shoppers willing to spend on big-ticket discretionary items from its warehouse aisles.

Regardless of Home Depot’s Q1 2025 earnings report illustrating a U.S. comparable sales growth figure of 0.2%, Placer.ai was quoted by Battle as recording a more significant 4.2% year-over-year fall in visits per location, indicating that the orange-and-white brand was seeing weakened foot traffic to its stores stateside.

Home Depot EVP of merchandising, Billy Bastek, underscored the fact that the company’s customers were exhibiting aversion to laying down cash (or credit) to finance large home improvement projects.

“We were pleased with the performance we saw in categories such as building materials, lumber, and hardware,” Bastek said during a May 20 earnings call.

“However, we continue to see softer engagement in larger discretionary projects where customers typically use financing to fund the project such as kitchen and bathroom remodels,” he added.

Home Depot CEO Says ‘Macro Uncertainty’ Tied to High Interest Rates in the Housing Market at Least Partially To Blame for Stagnant Spend

On the same call, Home Depot CEO Ted Decker gestured toward the turbulence presented in the current U.S. economy — particularly related to high interest rates cutting into homeowners’ budgets — as being particularly problematic for customers looking to finance a large-scale reno or home improvement project.

“The large project generally requires some sort of financing. And while there are literally trillions of dollars of equity available to be tapped in the homes, I think there’s still enough macro uncertainty,” Decker said.

“And again, those stubbornly high interest rates, people are painting again and working in their yards and doing smaller projects, but just have not engaged in the larger projects,” he continued.

A May 22 report from the National Association of Realtors (NAR) reinforced this picture of the housing market, with existing-home sales sliding 0.5% in April, a retreat of 2% from year-ago figures. Existing home prices ticked upward by 1.8% from April 2024, producing the 22nd month in a row of year-over-year price increases.

Finally, NAR quoted Freddie Mac figures suggesting that mortgage rates had fallen (to 6.81% for an average 30-year fixed-rate mortgage) as of May 15 versus year-ago figures (then pegged at 7.02%) — but this represents only a marginal decrease.