The news: Home improvement retailers are reining in costs as they brace for continued turbulence in the US housing market amid slowing sales, declining builder sentiment, and elevated mortgage rates.

• Home Depot is revising bonus requirements for managers, raising the minimum sales performance threshold they must reach to 95% from 90%, Bloomberg reported. It’s also cutting 800 jobs and said corporate staff will have to work in the office five days a week, replacing previous hybrid or remote arrangements.
• Lowe’s is cutting 600 corporate and support roles to redirect resources toward frontline, customer-facing store workers.

The cost control measures are likely a reaction to the US housing market continuing to show signs of weakness.

• The average 30-year fixed US mortgage rate fell to 6.17% in the week ended February 13 from 6.21% the prior week, per the Mortgage Bankers Association, but that’s still more than double the sub-3% levels during the pandemic era.
• US homebuilder sentiment slipped a point in February to 36, the second month in a row of decline and the lowest reading since September, per the National Association of Home Builders/Wells Fargo Housing Market Index. Builders cited affordability challenges and high land and construction costs.
• Existing home sales fell a wider-than-expected 8.4% in January from December, the largest monthly drop since February 2022.

For home improvement retail, lower home sales generally mean fewer renovation projects. At the same time, tariffs and other input costs continue to pressure margins as consumers remain paralyzed by high borrowing costs. Both retailers lowered their full-year 2025 outlook in November, citing reduced demand for big-ticket projects.

Implications for retailers: The job cuts and bonus changes at Home Depot and Lowe’s are classic cost-discipline moves to protect margins and cash flow. With little near-term relief for housing in sight, the retailers are trying to lower their cost structures and run their stores more efficiently. By adjusting factors within their control, retailers can position themselves not just to weather the current slowdown but to compete more aggressively when housing eventually improves.

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