The mood has shifted in home improvement. Shoppers look harder at every dollar, even as projects still promise real payback. Home Depot sits in the middle of that tension: a place to dream, yet a barometer for strained budgets. People still want upgrades that add value, though price spikes and job worries now shape what gets done—and when. Foot traffic tells the story: intent remains, yet caution rules days and stretches decisions.
Why shoppers pull back and what they still value
Planning a better space still brings joy and payoff. Garage door replacement posts 268%. Steel entry doors reach 216%. Stone veneer returns 208%. Fiber-cement siding lands at 114%. A midrange kitchen refresh delivers 113%. Even paint helps, with navy and olive among 2025’s top picks.
Shoppers now weigh those numbers against tighter wallets. They also want small wins. Painting a room feels manageable and uplifting. It can raise perceived value when the tone fits the home. People compare lists, track costs, and prioritize durability. They space projects over months instead of weekends.
Amid that recalibration, Home Depot remains familiar ground. The aisles promise tools, ideas, and practical advice. Yet the cart fills more slowly. Households now swap ambitious makeovers for targeted fixes. They still want quality, but they watch tickets closely. Purpose stays; pace changes—and so do baskets most weeks.
Home Depot under pressure from prices and jobs
Inflation picked up to 3% in September, from 2.3% in April before tariffs. The effective tariff rate jumped to 17.9%, the highest since 1934, after just 2.4% in January. Executives flagged “modest” price moves as vendors passed through costs, while teams trimmed elsewhere to protect key assortments.
The labor picture also tightened. August unemployment reached 4.3%, the highest since 2021, and the last read before the shutdown. Many families cut back. Even fast-casual names like Chipotle cited customer strain. People delay non-urgent projects and seek deals. They accept smaller scopes, but push big plans to later.
That reality hit Home Depot traffic and transactions. Average tickets rose 1.4% year over year, helped by mix and pricing. However, transactions dipped 0.4% in Q2. The comp transaction count fell 0.5% in the first half. Across all stores, transactions slipped 0.9% in Q2. Fewer trips; sharper trade-offs.
A housing market that chills renovation budgets
During lockdowns, projects boomed, thanks to time at home and cheap money. Today the landscape is different. Mortgage costs surged. HELOCs averaged 7.86%, after sitting below 4% in 2021. New home sales were 800,000 in August 2025. Existing sales were 4.06 million in September, a notably slower clip.
Prices stayed firm. The median new home was $413,500 in August 2025. The median existing home was $415,200 in September. Turnover hit multi-decade lows, according to industry chatter. Leaders described the market as close to frozen. Few listings. Fewer moves. That saps remodeling momentum for larger jobs.
Even so, Home Depot benefits from necessity. Roofs leak. Appliances fail. Small budgets can cover patching, sealing, or safety fixes. Customers now break big ideas into phases. They buy what solves today’s problem and revisit the rest later. Stretching plans preserves cash while homes stay functional and safe.
What the store metrics say right now
The retailer’s July call laid out the scorecard. Tickets rose 1.4% on higher prices and mix. Transactions slipped 0.4%. Through six months, comp transactions were down 0.5%. Across the fleet, Q2 transactions fell 0.9%. Categorywide sales for building and garden dealers were down 1.1% through August, per Census.
Macro policy turned, yet results lagged. The Fed cut rates in September and again in October. Household spending still rose 0.8% in the week ending October 25. Yet Bank of America found home improvement spend fell 5.4% year over year that week. Consumers stayed careful, even as borrowing costs eased.
Sourcing adds complexity for Home Depot. Roughly half of U.S. inventory is domestic. The rest arrives from abroad and faces import taxes. Merchants negotiate hard, and they trim expenses to blunt increases. Stores raised some prices, but selectively. The priority is value, reliability, and in-stock basics that keep projects moving.
Home Depot faces new tariffs on key materials
Policy added fresh friction this fall. On September 30, the White House announced a 10% global tariff on softwood lumber. It took effect on October 14, 2025. Kitchen cabinets and vanities drew a 25% tariff, with that rate scheduled to jump to 50% on January 1, 2026.
The United States imports about one-third of the lumber it uses. Roughly 85% of those imports come from Canada, according to The Conference Board. Tariffs raise input costs, then ripple into retail price tags. They also slow promotional cadence. Buyers refocus on core sizes, while specialty options see thinner depth.
Those shifts test Home Depot traffic as shoppers rethink timing. Some trade down in materials. Others delay until clarity returns. Pros build estimates with contingencies for wood and cabinetry. Households stretch timelines. Stores double down on guidance, calculators, and financing links. Trusted support helps customers adapt while budgets stay tight.
What to watch before the next quarterly update arrives
Mid-November brings the next checkpoint as results arrive and tariffs begin to show. Home Depot will outline traffic, pricing, and inventory posture. Watch HELOC trends, the flow-through from rate cuts, and cabinet tariffs stepping higher on January 1. If jobs steady and costs cool, modest projects can lead a cautious rebound, while bigger plans wait for firmer signals. Expect targeted deals, clearer aisle guidance, and sharper value messaging from stores.