Home Depot CEO flags a disconcerting lack of faith in the American economy: ‘Our customers are telling us that they’re not investing’

Home Depot is struggling to beat a stalling housing market as customers delay their home improvement projects, CEO Ted Decker said. 

While the company defied analysts’ expectations on Tuesday’s Q4 earnings call—after three straight quarters of missing them—executives highlighted macro challenges to the business.

To start, the housing market is stalled. Despite mortgage rates remaining at a three-year low, homebuyers are not budging. Home sales of previously occupied U.S. homes fell sharply in January, down 8.4% from December. Nearly 20% of new homes faced a price cut in the fourth quarter of 2025, according to a Realtor.com report. 

Fourth quarter net earnings fell about 13%, to $2.6 billion, compared to the same period last year. Decker said that the decrease was driven by home prices and housing turnover, which is at a historical low, and “as significantly reduced demand for projects and other purchases associated with buying and selling a home.” The company is now considering lower prices.

“What may drive us to the lower end of the [price] range would be the market’s not performing as well,” Decker said, adding that consumer uncertainty would be the number one driver. “Our customers are telling us that they’re not investing certainly in large projects and that has everything to do with consumer confidence and sentiment, jobs’ picture, overall price levels, and affordability in the economy.” 

Challenged industry

Decker warned that a decrease in home prices could lead to “a negative psychological impact,” and keep turnover low while increasing price elasticity. The company expects sales to increase between 2.5% to 4.5% during fiscal year 2025 and plans to open 15 new stores. 

Decker said the company’s year-over-year price outlook is “modest,” but if home affordability does not improve, customers could be more sensitive to higher in-store prices. “That could be on the macro why we would have a more challenged year as an industry.” 

Last month, Home Depot laid off 800 workers based remotely or at the company’s Atlanta headquarters. Decker also announced that corporate employees will have to return to the office five days a week, beginning in April. 

Decker said the improved affordability is the key to stronger market performance for the company, but he’s not counting on tax refunds to boost sales, as he predicts that lower-income earners use the money to pay down debt, and higher earners will save or invest it. 

Home Depot leaders were asked about the impacts of the Supreme Court’s ruling on Friday that struck down the Trump administration’s tariffs under the International Emergency Economic Powers Act. 

“It’s important to remember that more than 50% of our products are sourced domestically and haven’t been subject to tariffs,” said Billy Bastek, executive vice president for merchandising. “Obviously, the announcement on Friday and then the administration over the weekend, we’re still analyzing the impacts of those decisions.”

This story was originally featured on Fortune.com