You get a feel for the housing market in a lot of ways. You can look at listings online or in newspapers. You might drive around a neighborhood to check out the houses, the people who live there, and the condition of roads and schools.
Sometimes, you get signals from the stock market that make you a more informed buyer or seller.
The stock market offered a downer of a signal on Feb. 25 to the housing market, thanks to weak earnings guidance from Lowe’s Companies, one of the biggest home-improvement retailers.
Lowe’s sells wood, appliances, tools, cement, and flowers and plants across the country. A key customer segment is builders. Another is contractors doing renovations. A third is homeowners embarking on various projects around the home.
Like most retailers dealing with construction and home improvement, Lowe’s knows that the housing market since the end of the Covid pandemic has struggled for several reasons.
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Job growth in many part of the country is slowing.
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Prices are high in many markets, especially on the East and West Coasts.
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And there are a lot of homeowners who refinanced into low-rate mortgages who don’t want to move or can’t afford to move.
“While short-term interest rates have been coming down, affordability and the lock-in effect continue to pressure demand,” Brandon Sink, Lowe’s chief financial officer, told analysts.
He described consumer spending as resilient, yet also noted that many consumers are cautious about big discretionary purchases. And it’s not clear how larger tax refunds, expected this year thanks to the 2025 tax bill, will translate into home-improvement projects.
In terms of the housing market generally, “it is also unclear when mortgage rates will ease, which will continue to exert pressure on existing home sales and new home construction,” he added.
Here we must note that mortgage rates are right around 6% — the lowest level since 2023, according to Mortgage News Daily data — but nowhere near the 3% rates we saw in 2020.
“Taking all of this into account,” Sink said, “we forecast the home improvement market to be roughly flat this year in a range of down 1% to up 1%.”
Along with a lackluster home-improvement market, just about any stock of companies that operated in and around housing has dropped.
The iShares U.S. Home Construction exchange-traded fund dropped 3.4% to $106.43. The ETF had been up as much 14.4% for the year, ahead of the Lowe’s earnings report. By the end of the day, the gain had shrunk to 10.5%. The ETF had fallen about 5% in 2025.
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