Home Depot Stock Faces Challenges Amid Housing Market Softness and Inflation Surge. Experiencing a 12% year-to-date decline, [url="https://moneymystica.com/why-is-home-depot-stock-dropping/"]Home Depot stock (NYSE: HD)[/url] currently stands at approximately 291.59 USD per share, showcasing a 3.72 (1.29%) increase today. Despite the YTD setback from $316.50 to $290, we foresee a gradual long-term recovery for the world’s largest home improvement retailer, HD, which has lagged behind broader indices like the S&P, growing approximately 6% over the same period.

[url="https://moneymystica.com/why-is-home-depot-stock-dropping/"]Why is Home Depot (HD) Stock Falling so much[/url]

The recent decline in Home Depot's stock can be attributed to the prevailing challenges, notably the subdued state of the housing market and the surge in inflation rates. As the Federal Reserve aggressively raised interest rates since 2022 to combat inflation, mortgage rates witnessed a significant increase, subsequently impacting home sales. Despite a slight decline to 6.32% as of the week ending March 30, from the previous week's 6.42%, the 30-year fixed-rate mortgage remains notably higher than the 4.67% recorded a year ago, indicating the lasting influence of the Federal Reserve's actions on mortgage rates.

Beyond weather concerns, a shift in consumer behavior is impacting the home improvement landscape. With a noticeable decline in customer demand, Home Depot has adjusted its fiscal year outlook, triggering a sharp drop in shares for the home-improvement retailer and influencing a dip in the Dow Jones Industrial Average.

Home Depot Stock witnessed an initial 4% to 10% drop post the fiscal 2023 first-quarter earnings report, later recovering to a 1.4% decline by midday. Despite surpassing earnings per share expectations through a share repurchase plan, a significant revenue miss and revised guidance caught investors' attention.

The reported revenue of $37.26 billion fell below the expected $38.3 billion, marking the largest miss since 2002. CEO Ted Decker attributed this shortfall to lumber deflation and adverse weather, particularly impacting the Western division.

Adjusting the full-year sales guidance to a decline of 2% to 5%, and revising the previous mid-single-digit drop in earnings per share to a projected range between 7% and 13%, has prompted investors to focus on the long term, contributing to a recovery from morning lows in the stock.