Home Depot customers stick to smaller projects as housing costs stay high

Home Depot customers are still spending on their homes, with smaller projects supporting demand as Americans contend with elevated mortgage rates and high home prices.

The home improvement retailer said Tuesday that second-quarter sales rose 5.7% from a year ago to $47.9 billion, while comparable sales increased 1.7%. Comparable sales in the U.S. climbed 1.3%. The results came as consumers continued to favor smaller-scale home improvement work over larger projects.

“Our second quarter results exceeded our expectations. We saw broad-based demand across the business as customers continued to engage in smaller projects,” Home Depot Chief Financial Officer Richard McPhail said.

Shoppers also spent more per transaction. Home Depot’s average ticket rose 2.8% from a year earlier to $92.50, while comparable customer transactions declined 1%.

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The spending pattern comes as the housing market remains constrained by affordability pressures, potentially limiting demand for larger renovations that are more likely to require financing.

Existing-home sales fell 1.7% in July from the previous month to a seasonally adjusted annual rate of 4.06 million, according to the National Association of Realtors. Meanwhile, the median existing-home price rose 2% from a year earlier to $434,100.

Borrowing costs also remain elevated. The average rate on a 30-year fixed mortgage was 6.67% as of Aug. 13, according to Freddie Mac, up from 6.58% a year earlier.

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High borrowing costs and home prices can raise the hurdle for home purchases and larger renovation projects, even as homeowners continue spending on smaller projects around the house.

Home Depot reported second-quarter net earnings of $4.8 billion, or $4.79 per diluted share. Adjusted earnings were $4.92 per share.

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Despite the uneven housing environment, the Atlanta-based retailer reaffirmed its fiscal 2026 outlook. Home Depot continues to expect total sales growth of approximately 2.5% to 4.5% and comparable sales growth ranging from flat to 2% for the year. The sales guidance is consistent with the outlook Home Depot issued earlier in fiscal 2026.