Home Depot reports fiscal second-quarter results Tuesday morning as mortgage rates remain above 6.5%, the Federal Reserve holds its benchmark rate at 3.50% to 3.75%, and the retailer enters the quarter with large discretionary home projects still under pressure.
Home Depot will report its fiscal second-quarter results on Tuesday, August 18, at 9 a.m. ET, giving investors and homeowners a fresh look at whether high borrowing costs are still holding back renovation spending across the U.S. housing market. The company confirmed the earnings schedule on August 4.
The headline sales and earnings numbers will matter, but the more revealing signal may be underneath them: whether Americans are again committing to expensive, multi-category home projects or continuing to spend mostly on maintenance, repairs and smaller jobs.
That distinction has become more important because the Federal Reserve held its federal funds target at 3.50% to 3.75% on July 29, while mortgage and home-equity borrowing costs remain elevated. Home Depot itself has repeatedly linked the strength of its larger-project business to housing activity, credit conditions and affordability.
Home Depot entered the quarter with big projects still under pressure
Home Depot’s first-quarter results already showed the split. The retailer reported $41.8 billion in first-quarter sales, up 4.8% from a year earlier, while comparable sales increased just 0.6% and U.S. comparable sales rose 0.4%.
Comparable transactions fell 1.3% while the average comparable ticket increased 2.2%. Home Depot also reaffirmed its fiscal 2026 forecast for comparable sales ranging from flat to 2% growth. Those figures came directly from Home Depot’s May earnings release.
More important for the rate story, Home Depot said transactions above $1,000 increased 0.8% year over year, but larger discretionary projects remained under pressure. Pro customers posted positive comparable sales and outperformed DIY customers.
Management went further during the first-quarter call. Home Depot said large, cross-category projects remained muted, and then-CEO Ted Decker said the company was not expecting a marked improvement in underlying demand; its expectation for stronger second-half comparisons was tied instead to a normalization in storm activity. Tuesday’s results will show whether that picture changed during the spring and early summer.
Mortgage rates show why the financing hurdle still matters
The Fed does not directly set 30-year mortgage rates. Those rates are determined in financial markets and can move differently from the federal funds rate. But Fed policy remains an important part of the broader interest-rate environment affecting households, credit markets and housing. Our explainer on how the federal funds rate connects with Treasury yields and borrowing costs examines that transmission in more detail.
For homeowners, financing remains materially more expensive than it was earlier this year. Freddie Mac’s Primary Mortgage Market Survey put the average 30-year fixed mortgage rate at 6.67% on August 13, compared with 6.58% a year earlier. The same Freddie Mac historical series shows the 30-year rate was 5.98% on February 26.
That 0.69-percentage-point move has a meaningful cash-flow effect. On a hypothetical $400,000, 30-year fixed mortgage, principal and interest would be about $2,573 a month at 6.67%, versus about $2,393 at 5.98%, roughly $180 more each month, according to an Investozora calculation using Freddie Mac’s published rates.
The calculation excludes taxes, insurance, mortgage fees and changes in down payments, so it is an illustration rather than an estimate of any individual household’s actual cost.
Higher financing costs can matter to Home Depot in more than one way. They can make moving into another home more expensive, affect the economics of remodeling after a purchase, and raise the cost of borrowing against existing home equity.
Home-equity lines of credit are particularly relevant because the Consumer Financial Protection Bureau says HELOCs usually carry variable interest rates, meaning payments can change as the underlying rate changes.
The Fed’s latest H.15 data showed the bank prime loan rate at 6.75% in mid-August. Readers can see the broader household mechanism in our guide to how higher interest rates raise borrowing costs.
The pressure is visible in the mortgage market. Freddie Mac’s weekly survey shows the average 30-year fixed mortgage rate rising from 5.98% on Feb. 26 to 6.67% on Aug. 13, increasing the financing hurdle for households considering a home purchase or major renovation.
The chart below shows how that borrowing-cost backdrop changed through 2026. For Home Depot, the trend matters because homeowners facing higher financing costs may be more likely to prioritize repairs and smaller projects while postponing expensive, discretionary renovations.
The most important number may not be Home Depot’s total sales
Home Depot is large enough that its results offer a useful read on several different types of household spending at once. But total revenue alone can hide the distinction between replacing a broken water heater and committing tens of thousands of dollars to a kitchen, bathroom or whole-home renovation.
That is why Tuesday’s big-project commentary matters.
A household may still buy paint, hardware, garden supplies or maintenance materials while delaying a remodel that requires financing, a contractor or a large draw on savings.
If Home Depot reports continued strength in routine projects but weakness in large discretionary work, that would be consistent with a consumer who is still spending but remains cautious about expensive commitments.
It would not, by itself, prove that Federal Reserve policy caused the weakness. Housing prices, household income, consumer confidence, tariffs, construction costs, weather and other factors can also affect home-improvement demand.
Home Depot’s own filings identify the housing market, mortgages, home-equity loans, consumer credit and changes in interest rates among the conditions that can influence its business.
That distinction matters: Home Depot can provide evidence about homeowner behavior under current financial conditions, but its earnings cannot isolate the Fed as the sole cause.
Home Depot has already defined what a housing recovery would look like
There is another reason Tuesday’s commentary deserves close attention. At its December 2025 investor conference, Home Depot laid out both a normal fiscal 2026 outlook and a separate “Market Recovery Case.” Its preliminary base case envisioned a home-improvement market ranging from a 1% decline to a 1% increase and comparable sales growth of roughly flat to 2%.
The recovery case was much stronger: 4% to 5% comparable-sales growth and 5% to 6% total-sales growth. Home Depot CFO Richard McPhail explicitly tied that recovery scenario to momentum in housing activity and greater spending on large projects driven by pent-up demand.
That creates a useful benchmark for Tuesday. The question is not merely whether Home Depot sells more merchandise. It is whether the mix of spending is beginning to resemble the housing recovery the company itself has described.
If large-project demand remains weak, the gap between the company’s base outlook and recovery case could remain intact. If those projects begin improving alongside housing activity, it would be an early indication that some deferred renovation demand is returning.
U.S. consumers are still spending, but July showed some cooling
The broader consumer backdrop is mixed. The Census Bureau reported Friday that U.S. retail and food-services sales were an estimated $763.6 billion in July, down 0.6% from June but still 5.0% above July 2025.
Sales from May through July were 6.3% higher than the same three-month period a year earlier. The figures are seasonally adjusted but are not adjusted for price changes. The data were released by the Census Bureau on August 14.
That makes Home Depot’s report useful precisely because the national retail figures cannot answer the more specific question: what kinds of purchases are homeowners willing to make when financing remains expensive?
A stable overall consumer can coexist with weak renovation demand if households prioritize necessities and smaller purchases while delaying projects that require a large upfront commitment.
What to watch in Home Depot’s earnings Tuesday
The strongest evidence about rate-sensitive homeowner demand should come from a few areas.
Large-project and big-ticket activity. The key comparison is whether the pressure Home Depot reported on larger discretionary projects in the first quarter continued, eased or worsened.
Transactions versus average ticket. Rising sales driven primarily by higher ticket values would tell a different demand story from rising customer transactions.
DIY versus Pro demand. Pro outperformed DIY in the first quarter. Another divergence could reveal whether professional repair and maintenance activity is holding up better than discretionary household projects.
Fiscal 2026 guidance. Home Depot currently expects comparable sales to range from flat to 2% growth and total sales growth of roughly 2.5% to 4.5%. Any change or reaffirmation should be read alongside management’s explanation of underlying demand.
Housing and credit commentary. References to mortgages, home-equity borrowing, housing turnover or project deferrals could provide the clearest direct evidence of how financing conditions are affecting customer decisions.
The Fed will provide another piece of the puzzle a day later
Home Depot’s results arrive just before another potentially important event for interest-rate markets. The Fed’s July meeting ended with a 9-3 vote to keep the federal funds target at 3.50% to 3.75%.
Under the Fed’s normal schedule, minutes from that July 28-29 meeting are due three weeks after the decision, making Wednesday, August 19 the scheduled release point. The Federal Reserve’s official meeting calendar confirms that minutes are released three weeks after regularly scheduled decisions.
Those minutes will not determine what mortgage rates do next, but they may provide more detail about the disagreement inside the Fed and the conditions policymakers are weighing before the September meeting.
For homeowners, the sequence is unusually revealing: Home Depot on Tuesday can show what households are doing under today’s borrowing conditions; the Fed minutes on Wednesday can show how policymakers are thinking about the rates helping shape those conditions.
That makes this week’s Home Depot report more than a retailer earnings story. It is a real-time test of whether high financing costs are still keeping American homeowners in repair-and-maintain mode or whether the larger renovation projects that have been postponed are finally starting to come back.
