If you were to look at a chart of Home Depot's stock over the last 5 years, you'd have no idea the home buying environment hit generational lows last October.

HD shares are now trading near all-time highs, just under levels achieved in the height of the pandemic when consumers were in a home buying and home improvement frenzy.

This bullish action is driven by hopes of a home improvement turnaround. Does LikeFolio data support this? Yes.

On the macro front, things are certainly looking better.

Recent Fed Rate Cuts and sliding mortgage rates will serve as fuel to send the stock even higher.

Consumers are refinancing at increasing clips, lowering monthly home payments and in some cases pulling out lump sums for needed improvements.

Mortgage applications jumped 11% for the week ending September 20, 2024, driven by lower interest rates, which reached their lowest level since July 2022.

Refinance applications surged 20% from the prior week and are now 175% higher YoY, making up 55.7% of all mortgage applications as homeowners look to lock in favorable rates.

We think this improving macro environment benefits the home improvement sector as a whole, but we do see outsized gains for one major player vs. another.

Here's our breakdown of HD vs. LOW.

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