Falling mortgage rates boost demand, but buyer confidence remains fragile

A third straight weekly drop in mortgage rates did not snap buyers back into the market. Freddie Mac said the 30-year fixed-rate loan averaged 6.23% as of April 23, down from 6.30% the week before and 6.81% a year earlier, but the lower rate still has not been enough on its own to restore confidence.

Freddie Mac chief economist Sam Khater said the decline, along with a pickup in purchase applications, refinance activity and monthly pending home sales, showed improving momentum. The problem for retail, and especially for a chain like The Home Depot, is that momentum is not the same as certainty. Economic uncertainty, geopolitical concerns and lingering inflation worries are still pushing many would-be buyers and sellers to pause before they commit.

That hesitation matters on the sales floor. In home improvement, confidence often drives the biggest tickets. When shoppers feel good about their finances and the housing market, they are more willing to green-light a kitchen refresh, a flooring overhaul or a full-project package with install. When confidence weakens, the customer may still browse, compare and ask detailed questions, but the decision can stretch out over multiple visits.

The Home Depot has been navigating that kind of backdrop for months. In fiscal 2025, the company posted sales of $164.7 billion, up 3.2% from fiscal 2024, but comparable sales rose just 0.3% for the year and 0.4% in the fourth quarter. Chief Executive Ted Decker said the company’s fourth-quarter results reflected "ongoing consumer uncertainty and pressure in housing." Chief Financial Officer Richard McPhail said housing turnover has remained at historical lows since 2023, cutting demand for projects and purchases tied to buying and selling a home.

That weak turnover picture is not just a Wall Street talking point. Redfin said only 28 out of every 1,000 U.S. homes changed hands in 2025, or 2.8% of the national housing stock, the lowest rate in at least 30 years. For store teams, that helps explain why moving-related repairs, whole-home refreshes and other big-ticket jobs have been harder to count on, even when rates drift lower.

The company has said elevated interest rates, pressured housing affordability and general economic uncertainty have defined its recent operating environment, while knowledgeable associates and on-shelf availability remain critical to the store experience. In practice, that points to a market where smaller repairs, phased purchases and careful comparison shopping are more reliable than expecting a sudden remodeling surge. The rate headline may be moving in the right direction, but the customer’s mood is still setting the pace.