Lowe’s reported challenges in the US housing market, with shares rising 2.5% due to modest revenue and earnings growth, following an 18% decline since October. The persistent high mortgage rates, currently at 6.8%, contribute to a struggling sector.

For 2025, Lowe’s forecasts same store sales to remain flat or increase by up to 1% after a 3.1% revenue decline in FY2024. Conversely, comp store sales rose 0.2% quarter-on-quarter, ending an eight-quarter downward trend.

Home Depot’s CEO stated that housing turnover has likely bottomed out at approximately 3% of units, with no expected rebound or significant increases in new housing starts.

The latest update from Lowe’s highlights a familiar concern: the ongoing weakness in the US housing market. Despite shares climbing 2.5%, revenue and earnings growth remained moderate. This upward movement in share price comes after months of decline, with Lowe’s stock having fallen by 18% since October. The broader picture remains challenging, as persistently high mortgage rates, now at 6.8%, continue to keep prospective homebuyers on the sidelines. Elevated borrowing costs limit activity, reducing demand for home improvement projects and renovations—key drivers of Lowe’s performance.

Looking ahead, the company’s outlook for 2025 suggests no major sales rebound. Same-store sales are projected to be unchanged or rise by a modest 1%, following a revenue dip of 3.1% in the previous financial year. However, one recent development offers a slight shift in momentum: comparable store sales in the last quarter edged up 0.2%, marking the end of an eight-quarter decline. That increase, though small, is a break from the persistent downward trajectory seen since early 2022.

Meanwhile, Home Depot’s leadership reinforced concerns about the broader market environment. Ted made it clear that housing turnover appears to have stabilised at roughly 3% of total units. From that level, Home Depot does not anticipate a resurgence in housing transactions or a wave of new construction. That statement suggests that, barring external changes, demand for home improvement retail is unlikely to change dramatically in the coming months.

For those monitoring price movements, these updates provide plenty to consider. Investors have already adjusted expectations, as reflected by Lowe’s recent share price recovery. The stabilisation in comparable sales might suggest a floor has formed for now. However, the absence of a rebound in housing market activity keeps long-term growth prospects constrained. Mortgage rates remain high, affordability concerns linger, and with no major pick-up in home sales or new construction expected, the pace of any recovery looks uncertain.

As market trends play out, positioning will need to account for these contrasting signals. Some risks remain elevated, while recent earnings reports indicate that the sector may not deteriorate much further in the near term. Price action in the coming weeks will reflect how much of this has already been factored in.