The world of construction is in trouble, pretty big ones. Sales have only gone up 0.2 percent in the United States and the company has had to lower its expectations because, between tense consumers, impossible mortgages and prices that do not stop rising, the market is practically frozen.
And, besides the fact that people now spend less, there are no projects like before, not even in more well off families, everything is very expensive and inflation does not stop, so the feeling of economic uncertainty is making users postpone (indefinitely in many cases) any type of renovation they are going to carry out.
North American Builder’s Supply files for Chapter 11
That’s right, the main competitor of Home Depot and Lowe’s has declared bankruptcy under Chapter 11. For now, it will continue operating while it seeks to reorganize its finances. Apparently, the company filed its petition on December 3, 2025, declaring between 500,001 and 1 million dollars in assets and liabilities.
According to court documents, the filing appears to be due to financial difficulties, claims and litigation (including a lawsuit from Proventure Capital) for lack of payments.
The numbers do not add up
What economic reports show seems ironic, there is more total revenue, but profit is much lower, in store traffic has plummeted and high budget projects (which are the ones that leave the most margin) have simply disappeared from the radar.
“People are postponing big expenses because they feel that any economic move can turn against them” The CEO, Ted Decker
And the truth is, with how expensive it is to get into debt now, it is not difficult to understand it…
Housing is paralyzed
To understand the problem you have to see what the underlying problem is, the real estate market. Mortgage rates remain above 6 percent, obviously people are not buying or selling… and if there are no moves, there are no renovations, nobody paints, nobody changes their bathrooms… Almost logical in these cases.
And, even spending on home improvements fell 5 percent in October, the worst figure in more than a year!!
Tariffs and more tariffs…
As if all the above were not enough, the tariffs imposed by the Trump administration have made everything much more expensive (even imported materials). Building a new house can cost between 7,500 and 10,000 dollars extra just because of tariffs! Wood, cement, appliances… everything costs more. And when the cost goes up, either the company loses margin, or it passes it on (that is, the customer pays more and buys less).
Home Depot’s plan
The company is making changes so that its business comes out strengthened. The purchase of SRS Distribution for 18,250 million and GMS for 5,500 million was not a coincidence, obviously! Home Depot wants to become the largest supplier for construction companies, contractors and remodelers. Less DIY, more “serious” business (not that your floor tile renovation is not serious, George)
This way they can offer credit, payment flexibility and financial support for professional clients… something unthinkable a few years ago for a company intended to sell screws to the public.
National problems
The home improvement sector has always been a thermometer of the United States economy. When it goes up, it normally means there is optimism and people invest, move, plan for the future… When it goes down… it is usually a sign that rough times are coming (and they are not fun).
The problem is that people spend less, not because they want to save but because they fear spending and that some economic misfortune may occur, it is something like a survival plan…
So, no, Home Depot is not just having a bad quarter, it is just surviving the national situation that we are all living, stress, insecurity and paralysis in this chaos. There are many things that have to change (and improve) for everything to go back to normal… don’t you think?