Falling Home Depot Sales Are Typically Bad News for the Housing Market — But Warren Buffett's Recent Move Reveals Another Striking Development Millions of U.S. homeowners can't afford to give up their current mortgage rates.
By Amanda Breen Edited by Jessica Thomas
Key Takeaways
- Americans are hesitant to buy homes amid high prices and mortgage rates.
- Slumping Home Depot sales typically indicate a housing market cool — but Berkshire Hathaway is betting big on home builders.
Between sky-high home prices and mortgage rates, it's safe to say the housing market's taken a post-pandemic dive.
Home Depot sales, a "closely watched barometer for the housing market," dipped 2% last quarter as consumers tackled fewer home improvements — but Berkshire Hathaway CEO Warren Buffett is still investing in home builders big time, CNN Business reported.
Related: Is the Real Estate Housing Market Crashing? | Entrepreneur
Home Depot's slumping sales do seem to capture the sentiment shared by many Americans on the housing market today.
Just a few months ago, Gallup's annual poll found that 78% percent of Americans believe it's a bad time to buy a house — a major departure from the record-high 81% who thought it was a good time to buy in 2003 amid increasing homeownership rates.
And people are just as hesitant to sell too. Millions of U.S. homeowners can't afford to give up their current low mortgage rates; only 1.08 million existing homes were for sale or under contract at the end of May, The Wall Street Journal reported.
Related: Report: Housing Affordability Is at an All-Time Low | Entrepreneur
Now, the market for brand-new homes is taking off. Newly built homes made up almost one-third of single-family homes on the market across the country in May, compared with the historical standard of 10%-20%, according to the outlet.
And Warren Buffett's betting on the new-build market too: Berkshire Hathaway disclosed new stakes in Lennar, D.R. Horton and NVR in a securities filing Monday, per CNN.
