Home Depot faced weak consumer demand amid headwinds in the US housing market. As the company struggles to boost sales, it is cutting a key employee benefit after recently adopting several bold cost-cutting measures.
In the third quarter of 2025, Home Depot’s U.S. comparable sales rose just 0.1% year-over-year, according to the company’s most recent earnings report. Also, recent data from Placer.ai showed that foot traffic at Home Depot same-store locations fell 0.4% year-over-year during the quarter.
Home Depot’s weak sales come as many consumers have shied away from buying new homes due to high interest rates and low supply in the U.S. housing market. It also comes after raising some of its prices in its stores due to tariffs.
During an earnings call in November, Home Depot CEO Ted Decker said the company continues to see customers cut back in tackling large home improvement projects, which are typically financed through loans.
“What’s affecting us and home improvement is the continued pressure in housing, in the growing consumer uncertainty,” Decker said. “So consider housing. I mean, housing has been weak for some time. We all know about the higher interest rates and the affordability concerns. But what we’re seeing now is even lower turnover; housing activity is really at a 40-year low as a percentage of the housing stock.”
According to data from the National Association of Realtors, sales of existing homes in the U.S. fell 4.4 percent from a year ago last month, while the median sales price of existing homes hit $396,800.
Even though interest rates have fallen in recent months, data from Freddie Mac showed that the average 30-year mortgage rate remains above 6 percent.
“Due to tight supply, the median home price hit a new high in January,” NAR Chief Economist Lawrence Yun said in a news release.
As Home Depot struggles to grow sales, it has decided to limit employee bonuses, according to a recent report from Bloomberg.
The home improvement retailer sent a memo to eligible employees at its stores and corporate offices informing them that it is raising the minimum sales performance threshold for bonuses from 90 percent to 95 percent.
When employees reach this minimum, they will receive an adjusted payment of 25% of the target, down from 50%.
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Home Depot said in the memo that the new bonus restrictions are more closely aligned with “pre-pandemic standards.” These changes will be reflected in the bonuses that are distributed in September.