Home Depot CEO points out a worrying lack of confidence in the American economy: ‘Our customers are telling us they’re not making investments’

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The company is struggling to overcome a stagnant housing market as customers postpone their home improvement projects, CEO Ted Decker said.

Although the company exceeded analysts’ expectations during Tuesday’s Q4 earnings call—after three consecutive quarters of falling short—executives pointed out the macro challenges facing the business.

First of all, the housing market is at a standstill. Even though mortgage rates have remained at a three – year low, homebuyers are not making a move. Sales of previously occupied U.S. homes decreased in January, down 8.4% from December. Nearly 20% of new homes [situation not clear in original] in the fourth quarter of 2025, according to a [source not clear in original].

Fourth – quarter net earnings dropped by about 13%, to $2.6 billion, compared with the same period last year. Decker said that the decline was caused by home prices and housing turnover, which are at historical lows, and “a significantly reduced demand for projects and other purchases related to buying and selling a home.” The company is now thinking about lowering its prices.

“What might push us towards the lower end of the [price] range is that the market is not performing well,” Decker said, adding that consumer uncertainty would be the primary factor. “Our customers are telling us that they’re definitely not investing in large projects, and that has everything to do with consumer confidence and sentiment, the jobs situation, overall price levels, and affordability in the economy.”

Challenged industry

Decker warned that a decrease in home prices could result in “a negative psychological impact” and keep turnover low while increasing price elasticity. The company anticipates that sales will 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 doesn’t improve, customers could be more sensitive to higher in – store prices. “That could be the macro reason why we would have a more difficult year as an industry.”

Last month, Home Depot [action not clear in original] 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 starting in April.

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

Home Depot leaders were asked about the impact of the Supreme Court’s ruling on Friday that invalidated 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’s actions over the weekend—we’re still analyzing the impacts of those decisions.”