Existing Home Sales Hit Slowest Pace Since 2024 as Mortgage Rates Squeeze Buyers

What the latest housing data showed

US existing home sales slowed to their weakest pace since 2024, according to the latest housing data, even as the average 30-year mortgage rate climbed to roughly 6.49 percent. Higher borrowing costs are doing exactly what they are supposed to do to a rate-sensitive market: pricing out buyers who would otherwise be shopping for a home, and freezing in place current owners who refinanced at much lower rates years ago and see little reason to sell now.

Why mortgage rates matter for home-improvement retailers

Home sales and home-improvement spending move together more closely than most parts of the retail sector. A newly purchased home almost always comes with a round of renovation, from new flooring to kitchen updates to a fresh coat of paint, most of it purchased within the first year or two of moving in. When the number of homes changing hands drops, that entire wave of move-in spending shrinks along with it. This is a direct, one-step channel: higher mortgage rates lower sales volume, and lower sales volume lowers the turnover-driven purchases that home-improvement retailers depend on for a meaningful share of demand.

Which stocks, and why

Home Depot and Lowe's both carry this exposure, since both build a large part of their business around the renovation and repair spending that follows a home purchase. Neither company is named in the housing data itself, so the link runs through the mortgage-housing channel rather than direct news about either retailer. The effect is real but should not be overstated. Existing homeowners who are staying put still spend on repairs and appliance replacements regardless of the sales slowdown, and both companies have sizable professional-contractor businesses that are less tied to any single month of housing turnover than the DIY side of their sales.

Companies further from the housing transaction itself, including most of the broader retail and consumer sectors, do not have a clear enough tie to this specific data point to include here.

What to watch

Watch whether mortgage rates continue climbing or start to ease, since that single number does more to explain month-to-month home sales activity than almost anything else in the data. Existing home sales figures over the next few reporting periods will show whether this slowdown is a temporary reaction to a rate spike or the start of a longer stretch of weak turnover. Home Depot and Lowe's earnings commentary on comparable-store sales and professional versus DIY spending will show how much of this housing weakness is actually reaching their businesses.