The situation: Recent guidance from major home-related retailers suggests the housing slump will linger, with pressure on big-ticket spending likely to extend through this year. With turnover still muted, many households are delaying renovation and furnishing purchases.

• Even as Lowe’s sales rose 10.9% in Q4, it—like Home Depot—projected fiscal 2026 comparable sales ranging from flat to up 2%, pointing to modest growth at best.
• Wayfair expects mid-single-digit sales growth in Q1, compared with the 6.9% increase it posted in Q4, suggesting that momentum may cool.

The context: The housing market is stuck in a rut.

• Few houses are changing hands. US existing home sales fell 8.4% MoM in January and 4.4% YoY to a seasonally adjusted annual rate of 3.91 million, according to the National Association of Realtors (NAR).
• Costs keep rising. Median existing-home prices rose 0.9% YoY to $396,800, marking 31 consecutive months of YoY increases, per NAR.
• Mortgage rates are easing, but remain elevated. The average 30-year fixed rate was 6.10% in January, down from 6.96% a year earlier, according to Freddie Mac, but still more than double pandemic-era lows. With 51.5% of homeowners holding mortgages at 4% or less, according to Realtor.com, many have little financial incentive to move. As a result, the housing turnover that typically fuels renovation and furnishing spending remains stalled.

Implications for retailers: Faced with limited demand growth, retailers are tightening costs and sharpening their positioning. Home Depot recently eliminated 800 positions, while Lowe’s cut 600 corporate and support roles to protect margins.

At the same time, the slowdown is accelerating a category-wide sorting effect.

Lowe’s and Home Depot are doubling down on professional contractors, where demand has proved more resilient than DIY. That diversification, supported by acquisitions in recent years, is becoming increasingly important. Home Depot’s pro sales outpaced DIY, and its purchases of SRS Distribution and GMS reflect a long-term bet on owning more of the professional value chain.

Value players are gaining traction as well. Bob’s Discount Furniture is leaning into its low-price positioning, saying its merchandise is, on average, up to 25% less expensive than competitors, appealing to inflation-weary consumers. TJX’s HomeGoods posted 8% YoY sales growth in Q4 as its treasure-hunt model resonated with cost-conscious shoppers.

Wayfair is relying on breadth. Its marketplace model includes sofas priced at a few hundred dollars to those north of $40,000, allowing it to serve a wide range of consumers across price tiers.

In a stalled housing cycle, it is increasingly a sink-or-swim environment. Growth is flowing to retailers that claim a distinct position and execute with discipline. Those that fail to differentiate risk being pushed under, as American Signature’s recent liquidation underscores.

Go further: Read more about Home Depot’s results and other key retailers in Live: Q4 2025 Retail & Ecommerce Earnings Tracker.