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With many households experiencing high financial anxiety<\/a>, it\u2019s no wonder that many are avoiding redoing their countertops. Home improvement giant Home Depot<\/a> knows as much \u2014 predicting clouds ahead in its earnings report<\/a> released on Tuesday.<\/p>\n When looking at stores open year-round, comparable sales dipped by 3.3% last quarter, while comparable sales in the U.S. dropped 3.6%. And Home Depot is buckling up to finish off a trying 2024. The company projects that sales in its stores will experience a dip in sales between 3% and 4% compared to last year. That\u2019s a far cry from the previous estimate<\/a> of a 1% drop.<\/p>\n \u201cDuring the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects,\u201d Ted Decker, chair, president and CEO of Home Depot said in a news release<\/a>. He claims, however, that \u201cthe underlying long-term fundamentals supporting home improvement demand are strong.\u201d<\/p>\n Indeed, it seems as if Home Depot has stumbled onto a new pulse check for Americans. Execs are noting\u00a0uncertainty stoked not necessarily by a recession, but by anxiety surrounding high inflation and interest rates.In short, people are feeling a bit shaky and are pushing back any building that new deck<\/a> or doing a bathroom remodel as a result.\u00a0\u00a0<\/p>\n \u201cWe\u2019re navigating an economic environment that is leading to greater consumer uncertainty and a deferral mindset,\u201d Home Depot CFO Richard McPhail told Fortune<\/em>. His fellow exec has similar messaging, as Decker explained in a post-earnings call that \u201ceveryone\u2019s expecting rates are going to fall.\u201d Meaning that the customer is set to \u201cdefer those projects,\u201d per Reuters<\/a>.<\/p>\n Part of what is happening is also likely linked to the lock-in effect<\/a>. Those who took advantage of low mortgage rates during the pandemic are finding themselves stuck in place, keeping tight on their pot of gold to avoid re-entering a now harsher homebuying landscape.\u00a0<\/p>\n And those sprucing-up projects don\u2019t really happen until it\u2019s time to put the \u201cFor Sale\u201d sign up, point out the Financial Times<\/a>. The subsequent lack of turnover has \u201ctaken out what\u2019s likely over $10 (billion) in demand in our market,\u201d McPhail told the outlet.\u00a0<\/p>\n Of course, home prices reaching record highs<\/a> also likely forces people out of redecorating or improvement projects as many are already spreading their wallets thin enough to simply purchase a home.\u00a0<\/p>\n \u201cHigher interest rates have pressured home sales and impacted home improvement projects typically financed by borrowing,\u201d McPhail explained to Fortune.<\/em> \u201cIn addition, persistent inflation across household expenses and services is crowding out durable goods spending.\u201d<\/p>\n Home Depot is confident you\u2019ll be back though, and like any ex-boyfriend, they\u2019ll be waiting the same as they once were.\u00a0<\/p>\n \u201cDespite these challenges, we believe the long-term fundamentals underlying home improvement are strong, and we will continue to invest in our business and focus on growing share in any environment,\u201d says McPhail.<\/p>\n<\/div>\n\nRecommended Newsletter: <\/strong>CEO Daily provides key context for the news leaders need to know from across the world of business. Every weekday morning, more than 125,000 readers trust CEO Daily for insights about\u2013and from inside\u2013the C-suite. Subscribe Now<\/a>.<\/div>\n