Jim Cramer anticipates Home Depot's upcoming numbers might disappoint, yet he suggests that recent climate disasters may aid future earnings by necessitating home rebuilding. Home Depot's shares have only risen 6% this year, significantly lower than the S&P 500's 21% increase, mostly due to a weak housing market. Home sales have dipped, affected by rising median listing prices at $396,900 and stagnant mortgage rates, leading to affordability concerns. Significant destruction from recent disasters in areas like LA and Florida hints at potential increases in home improvement business as reconstruction efforts begin.
"Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve. When combined with elevated home prices, housing affordability remains a major challenge."
"Cramer's theory about Home Depot's future earnings seems well-founded. The AP reports, 'The LA fires destroyed more than 16,000 homes, businesses, and other structures in upscale Pacific Palisades and working-class Altadena.'"
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