Home Depot has been struggling to reverse a concerning customer trend that continues to impact sales, despite recent efforts to boost demand.
In the second quarter of this year, the home improvement chain's comparable U.S. sales increased by 1.3% year over year, according to its latest earnings report.
However, its in-store foot traffic declined during the quarter. Recent Placer.ai data indicate that average visits per Home Depot location dipped 0.6% year over year, steeper than the 0.4% decrease its top rival, Lowe's, faced.
Weak consumer demand at Home Depot comes as it sharpens its focus on enhancing the customer experience to lift sales. For instance, in March, it launched a real-time delivery tracker that customers can use for big and bulky orders. It also expanded its free Pro Xtra Rewards program in July by adding four new discount perks for members.
During an earnings call on Aug. 18, Home Depot Chief Financial Officer Richard McPhail said that while the company saw "broad-based demand" across its business, "consumer uncertainty and housing affordability continue to pressure demand for larger home improvement projects."
Instead of taking on these projects, more customers are opting to tackle smaller ones that focus on repair and maintenance amid economic pressures.
Neil Saunders, retail analyst and managing director of GlobalData Retail, said in a recent Associated Press report that the number of large home improvement projects that Home Depot customers pursued during the quarter was lower than last year.
"The number of bigger-ticket projects undertaken remains down, falling by 2.1% over last year," said Saunders. "Concerns around financing and a previous lack of moving activity both remain major drags on the bigger-ticket segment."
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McPhail said on the earnings call that low housing turnover has contributed to this growing consumer trend.
"Housing turnover, just as one point in the economy that we watch, has been at historical lows," said McPhail. "It has never been lower as a percentage of the housing stock."
"Every time we have seen it hit the sort of 3% of the housing stock changing hands, over history, it has always bounced up relatively quickly," he continued. "We have seen housing turnover at these low levels for four years now."
Over the past four years, 30-year U.S. mortgage rates have averaged between 6% to 7%. Amid this trend, the housing turnover rate dropped to 2.8% (28 out of every 1,000 residences changed hands) last year, the lowest turnover rate in at least three decades, according to Redfin data.
McPhail said he doesn't see the housing market improving dramatically any time soon amid recent increases in mortgage rates.
"I do not think that we have seen much volatility from the recent increase in rates," he said. "We do know that when we see step-downs, we begin to see a little bit of life come into housing, but there is just no sign of an inflection point at this moment."
In July, the average 30-year fixed-rate mortgage reached 6.54%, up from 6.49% in June, according to Freddie Mac data.
Existing-home sales decreased by 1.7% month over month in July as the median existing-home price reached $434,100, up 2% from a year ago, recent data from the National Association of Realtors found.
As Home Depot continues to face housing market headwinds, it expects comparable sales to remain flat or increase by up to 2% in fiscal year 2026.
McPhail said Home Depot expects to continue navigating "unplanned and rising cost pressures throughout the year," relating to fuel, energy, and other product input costs.
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"We have a lot of volatility," he said. "We have unplanned cost pressure that is significant in the market, and we have frozen housing conditions. With all of that, we are focused on controlling what we can control. We do think that the range remains appropriate."
Despite these mounting pressures, Home Depot is betting big on its strategy to improve the customer experience to boost sales.
"Our teams are focused on ensuring on-shelf availability remains at record levels, on introducing new and innovative products, and deploying technology across the stores to enhance the customer experience," said Ann-Marie Campbell, senior executive vice president, during the call.
"This, coupled with all of our investments into our associate experience through technology-enabled tools, makes it easier than ever for associates to serve customers," she continued. "We have seen greater associate engagement, better customer satisfaction scores, and stronger sales."
This strategy also includes offering more convenience to customers. Campbell said 65% of Home Depot's deliveries of in-stock parcel products are same-day or next-day.
The company plans to make deliveries even faster, having recently confirmed the launch of Express Delivery at more than 2,000 U.S. locations, allowing customers to receive Pro and DIY essentials in 3 hours or less for a small flat fee.
Additionally, Home Depot recently updated its appliance delivery approach, which is so far yielding positive results.
"We've evolved our appliance delivery model to better serve direct purchases," Campbell said. "We now stock a select assortment of appliances that can reach our customers next day in certain markets. We are seeing a sales lift in these markets and will continue to lean in to broaden these efforts."
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This story was originally published by TheStreet on Aug 20, 2026, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.