The Home Depot’s stock shares fell 3% on Tuesday of last week after the company reported a miss in its earnings report and forecast a slowdown in sales over the rest of the year. The retailer’s stock prices had risen by 50% over the past three years as the housing market surged.

Experts say that Home Depot’s performance miss can be attributed to the cooling market and slowdown in new home construction. New Census and HUD data shows that residential construction fell to a two-year low in December 2018, down 10.9% from one year ago.

"Home Depot sales are definitely a sign of where the housing market is going in the next one to two quarters, since this is one of the places where developers get their steel and other materials for single-family homes," said Jason Haber, an agent at Warburg Realty in New York. "The earliest sign that you see is of less home building — new developers see if there is less demand in new housing. If demands for new housing are slipping, that’s a sign of weakness of the housing market.”

…Home Depot expects sales to grow by 5 percent this year, marking the retailer’s lowest gains since 2012. Fourth-quarter earnings per share were $2.09, falling short of Wall Street’s estimate of $2.16. Additionally, same-store sales, which is defined as those that have been open for at least a year, rose 3.2 percent, falling short of analysts’ estimates of 4.5 percent.

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