Fewer people can afford to buy homes. That’s also hurting Home Depot.

In the fourth quarter of the year, it saw net earnings decline 14.2%.

Those results reflected “ongoing consumer uncertainty and pressure in housing,” Home Depot CEO Ted Decker said in a written statement.

“The current mortgage rate environment and significant increase in home prices since 2019 have impacted housing affordability,” Home Depot Chief Financial Officer Richard McPhail said during a conference call with investors on Tuesday. “Housing turnover has remained at historical lows since 2023, which has significantly reduced demand for projects and other purchases associated with buying and selling a home.

“Our customers also tell us they have concerns over general economic uncertainty, including inflation, growing job concerns and higher financing costs,” McPhail said. “As we look ahead to fiscal 2026, we anticipate these pressures will persist.”

The decline in profit also represents a drop in storm-driven construction from 2024, when hurricanes Helene and Milton destroyed properties and drove demand for plywood, generators and roofing.

Decker said aside from storms, “underlying demand was relatively stable throughout the year.”

While tax refunds this year are expected to be larger on average, “we’re actually not counting on a lot of support from tax stimulus,” Decker said during the investor call.

Some people might spend tax refunds on home improvements, but it’s also likely some consumers will instead use the money to pay down debt or to put toward savings, according to Decker.

“Our customers are telling us that they’re not investing, certainly in large projects, and that has everything to do with consumer confidence and sentiment, jobs picture, overall price levels and affordability in the economy,” he said.

Some consumers might want to move — even if they have to stay on the sidelines of the housing market for now — and so they’re spending less on major home improvements and doing more repairs, Decker said.

The company is also still studying the impact of recent tariff turmoil. The U.S. Supreme Court ruled Friday it was illegal for President Donald Trump to impose tariffs under an emergency powers law without congressional approval. Trump subsequently announced he would institute a 15% global tariff under a separate law.

“We’re still analyzing the impacts of those decisions,” said Billy Bastek, Home Depot’s executive vice president of merchandising. He said the company’s teams in finance, sourcing, supply chain and logistics have spent nearly a year working through tariff impact. The company is “mostly done with tariff-related pricing actions” from levies imposed last April.

While profits took a hit last year, Home Depot continued to expand in 2025 by building new stores, growing its market share and increasing sales 3.2%.

For 2026, Home Depot plans to continue to expand by adding 15 new stores, up from 12 stores added last year. It forecasts sales growth of about 2.5% to 4.5%.

As housing has struggled, Home Depot has invested heavily in growing its lucrative business to professional contractors.

The company now has pro experience managers for stores, and has added tools for project planning and for creating lists and quotes using AI, along with other technology to better serve professional contractors.