Home Depot disappoints but housing starts soar
Mixed signals emerged from the housing market Tuesday even as lower interest rates primes the pump for demand.
Leading home improvement chain Home Depot posted disappointing quarterly results. Sales came in weaker than expected and the Dow component once again cut its full-year outlook.
Home Depot is having trouble executing its online strategy. It has beefed up resources to its website in order to keep customers away from rival Lowe's - but so far the investment isn't leading to higher sales.
The retailer says it is also being hurt by increased costs from tariffs, as well as lower lumber and copper prices.
Homebuilders, however, are taking advantage of those lower raw material costs. New housing construction rebounded in October, albeit at a slower-than-expected pace. And in a promising sign, permits for future construction surged to a high not seen in more than 12-years.
Construction of single-family homes is up five straight months.
Housing demand has jumped this year thanks to falling borrowing costs. The Federal Reserve has cut rates three times this year, which has helped push the key 30-year fixed mortgage rate down to 3.75 percent, according to data from mortgage finance agency Freddie Mac, from the peak of just under 5 percent hit a year ago.
