Home Depot braces for more project demand as housing inventory improves

Home Depot’s floor is not waiting for a housing boom. It is waiting for the kind of slow thaw that brings more buyers off the sidelines, more movers through the aisles and more project tickets tied to a closing date.

On June 16, National Association of REALTORS® Chief Economist Lawrence Yun said home sales should be modestly better in the second half of 2026 if inventory and housing supply keep expanding. The group’s current forecast calls for existing-home sales to rise 4% this year, with the median home price also up 4% and mortgage rates averaging about 6.5%. For store teams, that points to a cautious but real pickup in the work that follows a move: flooring, paint, appliances, storage, bath refreshes and outdoor fixes.

The latest housing data still looks uneven, but it is moving in the right direction. NAR said existing-home sales rose 0.2% month over month in May, the median time on market was 32 days, 33% of transactions went to first-time buyers and 25% were cash sales. NAR also said the typical homeowner is expected to gain about $16,000 in housing wealth in 2026. That is the kind of backdrop that can drive more refresh spending, but only if listings keep rising and shoppers feel confident enough to commit before rates and prices drift again.

Even then, this is not the kind of rebound that fills every department overnight. A 4% sales forecast, paired with 6.5% mortgage rates, suggests a market that is moving, not surging. Earlier, in November 2025, NAR had projected a 14% jump in existing-home sales for 2026. Realtor.com’s 2026 forecast is even more restrained, with existing-home sales up 1.7% and mortgage rates averaging 6.3%. That gap matters on the sales floor: better inventory can create more project activity, but muted affordability can still keep basket sizes tight and customers selective.

NAR also said recession risk remains limited in 2026 because of strong business investment, including AI and data centers, which helps explain why housing has not fallen apart even as it struggles to break out. Home Depot has been reading the same signals. In December 2025, the company said it would discuss a preliminary fiscal 2026 outlook and a market recovery case. By May 2026, it had reported first-quarter fiscal 2026 sales of $41.8 billion, up 4.8%, while CEO Ted Decker said underlying demand was still relatively similar to fiscal 2025 despite greater consumer uncertainty and housing affordability pressure. The signal for associates is clear: the recovery, if it comes, will show up first in project flow, then in staffing and merchandising pressure, and only later in the traffic counts.