Home Depot Beat Earnings. Why That's a Good Sign for the Housing Market.

Home Depot reported better-than-expected Q4 2025 results Tuesday morning, sending shares up nearly 2%. The home improvement retailer earned $2.72 per share, beating the $2.54 estimate, on revenue of $38.2 billion. The company also raised its quarterly dividend 1.3% to $2.33 per share and guided for 2.5–4.5% sales growth in fiscal 2026.

Why this matters beyond one retail chain

Home Depot is one of the best real-time indicators of housing market health in the U.S. When people are buying homes, doing renovations, or feeling financially secure enough to invest in their properties, Home Depot benefits. When housing is frozen (as it has been due to high mortgage rates lately) discretionary renovation spending dries up.

Tuesday's beat was the first time in about a year that Home Depot topped earnings estimates. Comparable store sales grew 0.4%, which is small, but positive after quarters of declines. The company's CEO noted ongoing pressure from high mortgage rates, which have kept many homeowners locked in place (unwilling to sell and give up their low-rate mortgages), but described the underlying demand environment as stable.

The housing context

The 30-year mortgage rate remains elevated, well above the sub-3% rates of 2021 that sparked the pandemic housing boom. As long as rates stay elevated, the home improvement market will remain somewhat subdued. But Home Depot's results suggest the worst may be stabilizing. Any meaningful drop in mortgage rates could unlock significant pent-up housing demand and be a major tailwind for the company.

Sources: CNBC, Kiplinger, Yahoo Finance