Fewer Homeowners Are Shopping At Home Depot In 2025 - Here's Why

If you've noticed shorter lines at the Home Depot checkout lately, it's not just in your head. Despite modest increases in the store's second-quarter earnings in 2025, customer visits were down. This has been a trend for Home Depot in recent years, but the reason isn't due to dissatisfaction with customer service, subpar products, or even rival store competition (though stores like Harbor Freight do offer cheaper tools, which likely plays a role). Rather, economic woes, including the widening gap in housing affordability along with increasing inflation rates, are making homeowners — as well as professional home service providers who serve those homeowners — frequent the big box hardware store less and less.

According to the National Association of Realtors, the median existing-home sales price increased by 2.1% year over year in September, while inflation rates rose to 3% the same month, according to the Consumer Price Index. Combine that with an unemployment rate of 4.3% in August (the highest since 2021), and it's clear homeowners are feeling the squeeze. As a result, home improvement projects are being put on the back burner. 

While tariffs are also a factor, Home Depot's executive vice president of merchandising, Billy Bastek, said on an earnings call in August (via Investing.com) that they aren't a primary concern for the company. "Over 50% of our products are sourced domestically and wouldn't be subject to any tariffs," Bastek said, adding, "There'll be some modest price movement in some categories, but it won't be broad based."

While Home Depot is still a reliable and affordable retailer for top-quality tool brands, it is not immune to broader consumer trends. On the August earnings call, chief financial officer Richard McPhail said, "Our customers still tell us that the rate environment is giving them pause on larger remodeling projects that would typically require debt financing." Many homeowners rely on home equity line of credit (HELOC) loans for larger projects, and while the current rate of 7.86% is lower than this time last year, it is still high compared to recent years, with the lowest post-pandemic rate dipping down to 3.87% in 2021, according to Bankrate.

So while customers may still head to the store for a new can of paint or a few supplies to complete their weekend honey-do lists, they are putting off larger renovations for now. Even though certain home upgrades are shown to increase a home's value and are a good investment, current economic stressors are outweighing the ROI on home improvement projects. The big box retailer is responding to this shift and closed two of its subsidiary distribution centers in October, resulting in 135 layoffs, with plans to close another center in La Vergne, Tennessee, in early 2026, which will result in 108 additional layoffs. 

However, McPhail said professional service providers indicate the slowdown in home improvement projects is temporary. "Our pros we survey every quarter say that their customers tell them they're deferring projects. They're not canceling projects," he explained.