Home Depot shoppers may shift to smaller repairs as mortgage costs top $2,000

A $2,005 average monthly mortgage payment is a warning sign for the sales floor: when housing costs climb that high, many customers stop thinking about full-room remodels and start asking how to fix one problem at a time. In stores, that usually means more pressure on value, more sensitivity to promotions, and more conversations about whether a project can be split into phases instead of bought all at once.

Realtor.com’s data shows the typical mortgage holder’s payment crossed $2,000 in the fourth quarter of 2025, up 44% from 2021 and more than $600 higher than three years earlier. New homebuyers hit that threshold earlier, in September 2022, a sign that the burden is heaviest on newer loans. Mortgage rates opened the fourth quarter at 6.34% in early October and ended the year at 6.15%, and rates stayed above 6% since September 2022 except for one week in late February 2026. That has helped keep homeowners locked into low-rate loans and limited inventory recovery.

The low-rate squeeze is still visible in the loan book. In the fourth quarter, 19.7% of outstanding mortgages carried rates below 3%, down slightly from 19.8% in the prior quarter and about 24.6% in early 2022. Another 38% of outstanding mortgages sat in the 5-to-7-year loan-age window, the highest share in the data’s history, meaning a large group of borrowers is still holding mortgages originated in 2018 to 2020. For Home Depot, that matters because the customer walking in with a tight housing budget is less likely to buy a whole-house refresh and more likely to ask for a patch, a replacement, or a product that stretches the life of what they already own.

Home Depot has already been telling investors that the housing backdrop remains cautious. On Feb. 24, 2026, CEO Ted Decker said fourth-quarter results reflected ongoing consumer uncertainty and pressure in housing, while underlying demand was relatively stable after adjusting for storms. The company reported fourth-quarter fiscal 2025 sales of $38.2 billion, down 3.8% from the year-earlier period, while fiscal 2025 sales reached $164.7 billion, up 3.2% from fiscal 2024. Comparable sales rose 0.4% in the quarter and 0.3% for the year.

That caution showed up in Home Depot’s December investor-day outlook, which assumed the 2026 home improvement market could range from minus 1% to plus 1% and comparable sales could be roughly flat to up 2%. Decker also said customers were worried about housing affordability, job losses, inflation and higher financing costs. For associates at the Pro Desk, in kitchens, flooring and millwork, that means the winning conversation may be about helping a contractor or homeowner sequence a job, compare price points, or choose the repair that solves the immediate problem. In a market where mortgage payments have already cleared $2,000, practical selling is likely to matter more than ever.