1 Reason to Buy Home Depot Stock During This Historically Weak Housing Market
The housing market has slowed to a crawl, and Home Depot (NYSE: HD) stock is down about 11% over the past year, as of Nov. 2, 2026. For investors planning to hold five years or longer, that weakness could be an opportunity. One reason I would buy the stock now is that Home Depot is poised to benefit from pent-up demand when housing rebounds.
Home Depot sells tools, lumber, and building supplies to homeowners and contractors, and elevated interest rates have held spending on big projects in check. CFO Richard McPhail said in August that housing turnover, or the share of homes changing hands, “has never been lower as a percentage of the housing stock.” It has stayed near those lows for four years.
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The reason to buy is that customer demand is waiting, not gone. At a Goldman Sachs conference in September, McPhail said customers “have the means to spend” but feel uncertain about inflation, interest rates, and jobs. “They’re not yet ready to unleash that power of spending into large projects, but we know that the potential is there.” He added that demand hasn’t turned yet.
There are early signs of strength. Home Depot has posted eight straight quarters of same-store sales growth with professional contractors, who make up more than half of its sales. That indicates a business ready to explode when demand for housing finally turns.
The stock’s current forward price-to-earnings multiple of 22.5 is slightly below its three-year average of 24.4. But earnings are also still below their fiscal 2022 peak. Buying during a housing slump means paying a price set by depressed profits, which could prove a better value than buying once the outlook is rosy.
The risk is timing: If housing stays frozen for years, the stock could remain stuck as well, although investors would still receive an above-average dividend yield of about 2.8%.
For long-term investors, buying during the slump offers a chance to own the leading home improvement retailer before a housing recovery shows up in its results.
Should you buy stock in Home Depot right now?
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group and Home Depot. The Motley Fool has a disclosure policy.
1 Reason to Buy Home Depot Stock During This Historically Weak Housing Market was originally published by The Motley Fool