The U.S. home improvement sector is under pressure in 2026 as mortgage rates remain high. The average rate on a 30-year fixed mortgage stood at 6.53% in late May, the highest level in nearly nine months, making it more expensive to buy a home during what is usually the busiest part of the year.
That has cooled demand and added pressure across the retail side of the housing market. Even so, the two biggest home improvement stocks are not moving in the same direction. Home Depot’s (HD) stock has fallen 18.4% over the past three months, while the broader S&P 500 Index’s ($SPX) has gained 10.19%, showing that investors have become more careful with the group.
