Home Depot reported a 9% YoY decline in net earnings as homeowners pinched pennies because of the bad economy. A driving force behind Home Depot’s lower earnings was likely a big decline home sales.
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With the National Association of Realtors reporting that Existing Home Sales dropped back to 4.3 Million in April 2023. The lowest level since the 2008 crash. Such low sales mean that fewer homeowners need to do renovations or buy appliances at Home Depot.
Ultimately I fear this situation will get worse in coming quarters. As Mortgage Rates have now gone back up to 6.8%. Making it impossible for most Americans to afford a home. Especially in Housing Markets like New Jersey, Dallas, and Nashville, where the monthly payments have exploded.
One Housing Market where home prices and payments have come down is Austin, TX. Prices are down anywhere from 10-20% depending on the source. And some listings are showing 30% declines in just a year. Prices in Austin have come down so quickly because inventory has grown due to forced selling from corporate tech layoffs.
I believe Austin’s housing market is a signal to what to expect from the rest of America’s Housing Market when the recession turns worse and the unemployment rate increases. Something which is being predicted by these concerning earnings reports from Home Depot and Target.
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