Home Depot's share price decline could be a sign of an impending crisis: a similar situation occurred in 2008.

A warning signal from Home Depot has Wall Street experts talking about a major stock market crash looming. What this means for your retirement savings account, home values, and mortgage rates is explained. Daily Mail.

The stock market continues to hit new all-time highs, seemingly oblivious to the chaos in the Middle East. However, warning signs have emerged that a crash is just around the corner.

Home Depot shares have been declining since last fall and are now about 25% below their recent all-time high.

On the subject: 10 Signs the US Economy Isn't as Bad as the News Makes You Think

Why does Wall Street care about the performance of a single home improvement chain? Because Home Depot is seen as an indicator of the state of the US economy: its performance reflects the behavior of ordinary consumers.

There's another parallel. A similar decline in Home Depot shares during a rising market was observed shortly before the 2008 crash.

Of course, the current situation doesn't repeat the events of 2007. However, Home Depot is once again facing difficulties, and the reasons behind them are alarming.

The S&P 500 recently hit a new all-time high. Meanwhile, Home Depot shares remain about 25% below their peak, although they have recovered some of their losses.

I remember a year before the 2008 crisis, the S&P 500 index recorded its last closing high on October 9, 2007. On the same day, Home Depot shares were about 23% below their high.

Wall Street loves to look for such coincidences and see them as a possible forecast of future market dynamics.

The main reason for Home Depot's current decline is the weak housing market. Home sales remain low, and Americans are spending less on home improvements and renovations, which directly impact the company's revenue.

In the first quarter of 2026, the number of home foreclosures increased, primarily due to rising property taxes, insurance premiums, and homeowners association fees. However, the scale of the 2007 crisis remains far from being reached.

"We believe consumer uncertainty and ongoing pressure on the housing market are particularly depressing demand for home improvement products," said Joe Feldman of Telsey Advisory Group.

The company will publish its first-quarter report on May 19. Revenue is expected to grow by approximately 4% year-over-year, while profit is expected to decline.

Home Depot shares are lagging noticeably because low-income consumers are suffering from high gas prices and persistent inflation, while the housing market's problems have effectively halted major renovation spending, according to NinjaTrader senior economist Tracy Shewhart.

She noted, among other things, that Home Depot gave the first signals of the impending crisis in 2007, when the mortgage market was already beginning to falter.

Rob Spivey, research director at analytics firm Altimetry, believes the current decline is linked to broader processes, but they are significantly different from the situation twenty years ago.

"This is the first time in about 30 years that economic growth is being driven significantly by corporate investment," he said. "As a result, the market and the economy can grow even if the consumer situation remains challenging."

Before the conflict with Iran, markets were counting on the Federal Reserve cutting interest rates.

According to Spivey, this would give consumers a respite, support the housing market, and encourage more borrowing and renovations. However, with inflation accelerating again, there's little hope for policy easing.

"After the conflict began, the likelihood of interest rates being cut in the near future has almost disappeared, and rising gasoline prices have increased the pressure on family budgets," he emphasized.

TradeStation global market strategist David Russell doubts the current coincidence has any real predictive value.

"Home Depot may have been signaling before the housing market crisis," he explained. "But now conditions have changed significantly, and growth is driven by business spending and investment."

"Many former consumer market leaders, like Disney and Nike, are no longer as influential as they once were. And 2008 was a long time ago," Russell concluded.

Those concerned about a potential downturn should proceed with caution. For example, if you're considering making any significant changes to your retirement savings (such as a 401(k) plan), it's best to consult with a financial advisor first.

You may be interested in: top New York news, stories of our immigrants, and helpful tips about life in the Big Apple - read it all on ForumDaily New York

Preparing a portfolio for a recession typically means focusing on safer assets: increasing the share of cash, distributing investments in stable sectors such as healthcare, utilities, and essential goods.

Meanwhile, the US housing market remains relatively stable due to limited supply. Despite high mortgage rates, which are holding back sales, home prices overall continue to rise.

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