Key updates to start your day
Housing Slowdown Pressures Home Depot Sales
Home Depot reported softer quarterly sales as elevated mortgage rates and sluggish home turnover continued to weigh on home improvement spending.
The Atlanta-based retailer posted revenue of $38.2 billion for its latest quarter, representing a nearly 4% decline compared to the same period last year. During a Tuesday earnings call, Chief Financial Officer Richard McPhail said multiple factors are dampening demand for home improvement projects.
According to McPhail, persistently high mortgage rates — despite some recent easing — along with ongoing affordability challenges caused by sharp home price growth since 2019, have kept housing turnover near historic lows since 2023. Reduced buying and selling activity has significantly limited spending tied to moving, remodeling and related purchases.
He added that customers remain concerned about broader economic uncertainty, including inflation, job stability and higher borrowing costs.
Despite these headwinds, Home Depot exceeded analysts’ earnings expectations for the first time in a year. However, net income fell 14% year over year to approximately $2.6 billion for the quarter ending Feb. 1. Looking ahead, the retailer projects full-year 2026 sales growth between 2.5% and 4.5%, following 3.2% growth in 2025.
Home Depot and its primary competitor, Lowe’s, have both recently implemented workforce reductions and other cost-control measures in response to the challenging operating environment.
Consumer Confidence Ticks Higher
Consumer sentiment improved modestly in February compared to January but remains below late-2024 levels, according to data released Tuesday by The Conference Board.
The organization’s Consumer Confidence Index rose to 91.2 in February, up from 89 in January. (The index uses 1985 as a baseline of 100.) While the increase suggests easing pessimism, it remains well below November’s four-year high of 112.8.
Chief Economist Dana Peterson noted that although confidence improved slightly, concerns persist across income groups regarding personal finances and overall economic conditions. The survey’s preliminary results were finalized Feb. 17, prior to developments related to the Supreme Court’s rejection of emergency trade tariffs proposed by the Trump administration.
Similar to recent surveys conducted by the University of Michigan and the Federal Reserve Bank of New York, respondents cited ongoing worries about inflation, rising prices and the overall cost of goods. Written responses continued to lean pessimistic, with price pressures remaining top of mind for many households.
Office Attendance Edges Lower
Office utilization across 10 major U.S. markets averaged 53.5% of pre-pandemic levels for the week ending Feb. 18, according to the latest report from Kastle Systems.
That figure declined from 56.3% the previous week and remained below the 56.9% peak recorded in mid-January.
Among tracked markets, Austin led the nation at 76.4% of its pre-pandemic office occupancy level, followed by Dallas at 61.6% and Houston at 60.1%. Chicago reached 55.1%, while New York registered 52.6% and Washington, D.C., came in at 50.8%.
Kastle’s data is based on anonymized keycard activity from approximately 2,600 office buildings representing 41,000 tenants nationwide. While attendance levels have fluctuated week to week, overall office traffic has trended upward over the past two years as more employers require in-office work and scale back remote or hybrid arrangements.
Source: Original reporting by Lou Hirsh, CoStar News.
