A Home Depot store is seen in Washington, DC, on August 18, 2020. - US retailers were helped by the 2.2 trillion USD CARES Act stimulus package passed in late March which included one-time payments of 1,200 USD to all Americans as well as an additional 600 USD in weekly unemployment benefits for people who lost their jobs. Home Depot said stimulus payments also played a role in that company's 24.5 percent rise in second-quarter profits to $4.3 billion, as home-bound customers invested in home improvement projects like deck building, painting and landscape work. (Photo by NICHOLAS KAMM / AFP) (Photo by NICHOLAS KAMM/AFP via Getty Images)
Home Depot's sales are slowing.
NICHOLAS KAMM/AFP/AFP via Getty Images
New York CNN  — 

Home Depot, a bellwether of the housing market and US economy, said sales dropped over the winter and it’s a expecting a slow 2024.

Sales at stores open for at least one year fell 3.5% last quarter, and Home Depot projects that sales will continue to decline 1% in 2024.

“2023 was a year of moderation,” Home Depot CEO Ted Decker said in a news release Tuesday.

Demand for home improvement has fallen due to high mortgage rates and a slowdown in new home construction. In October, mortgage rates hit a 23-year high of 7.79%.

“One of the main issues [for Home Depot] continues to be a very sluggish housing market,” Neil Saunders, an analyst at GlobalData Retail, said in a note to clients Tuesday. “This continues to suck a lot of demand out of the market as home movers are, traditionally, big spenders on improvement.”

Many consumers have also shifted their spending from physical goods to experiences, such as travel and concerts. This shift has hurt Home Depot.

This is a developing story. It will be updated.