Housing Starts Going Up While Home Depot Goes Down

Credit: PYMNTS

The housing market sent mixed signals on Tuesday as lower interest rates pushed demand up further.

While Home Depot, the leading home improvement chain in the US, posted lower-than-expected results, home-builders have been busy. Home Depot just posted its third quarter results, which fell short of expectations. These poor results have led the Dow to cut its annual outlook once again. The troubles at Home Depot seem to be centered around the company’s rocky start at implementing the online side of its business. The home improvement chain has been trying to build up its online presence in order to undercut its main rival, Lowe’s. So far, the strategy has yet to increase their sales by a significant figure.

While Home Depot struggles, home-builders have fared better. Lower raw material costs led to a rebound for housing construction in October. While the pace of growth hasn’t quite met expectations, the news is still very good. Permits for new construction projects have now reached a high that hasn’t been seen for the last dozen years. These gains are, according to Freddie Mac, in large part due to the recent Federal Reserve interest rate cuts, which have helped push rates on 30-year fixed-rate mortgages down to just 3.75%.

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