Lowe's Is Down 30%, and Home Depot Is Down 18%. Here's the Housing Stock I'd Buy Even With 30-Year Mortgage Rates at 7.3%.

Home prices have become unaffordable for many renters, leading them to continue renting with friends or family instead of purchasing a home. This situation has worsened due to the Federal Reserve raising interest rates to combat inflation, making mortgages more expensive. Consequently, home improvement retailers Home Depot and Lowe's have experienced a decline in their stock prices.

Home Depot is now 18% below its 52-week high, while Lowe's shares are down 30%. Despite this, both companies are expected to survive the current challenges, with Lowe's appearing to be the better value. The housing market plays a significant role in the economy, and its stagnation indicates that people are less likely to undertake construction or home refurbishment projects.

While Home Depot's same-store sales rose by 1.7% in the second quarter of 2026, Lowe's saw a modest increase of 0.2%. However, the overall outlook for both companies remains gloomy. Investors are more pessimistic about Lowe's, but this could present a buying opportunity for long-term investors. Home improvement professionals may increase their spending as they continue to modify their homes, potentially benefiting Lowe's, which has been focusing on the professional segment while Home Depot has traditionally catered to contractors.

Lowe's recent acquisitions of pro-focused companies could help drive future growth, although the integration process currently poses a hurdle. Home Depot's higher dividend yield and stronger contractor business may appeal to long-term dividend investors, although Lowe's more favorable valuation and Dividend King status make it an attractive choice for income-focused investors.