Housing-turnover to big-ticket DIY to retailer cash-flow loop
A mortgage-rate threshold gates a self-reinforcing loop between existing-home turnover, big-ticket DIY comp, retailer margin/FCF, and buyback capacity. Toggle the regime to reverse the loop and see which name captures the operating leverage.
Rates stay elevated (near 6.67%)
Rates break toward 6%
elevated / compressing loop
Mortgage-rate to housing-turnover to big-ticket DIY comp to margin/buyback feedback loop, with regime toggle
30-yr mortgage rate
threshold gate near 6%
6.67% — above 6% through end-2026 (PNC)
breaking toward 6% — NAR: turnover unlocks
Existing-home turnover
July 4.06M SAAR · first-time 29%
suppressed
unlocks
Big-ticket DIY spend
move-related projects
frozen · HD comp txns -4 qtrs
re-opens · shoppers un-defer
Avg ticket & gross margin
big-ticket comps drag
ticket / GM drag
ticket / GM rebuild
Operating margin / FCF
cash-flow reservoir
compressed
rebuilds
feedback: thinner FCF raises
payout-ratio sensitivity to the rate gate
Buyback / payout gate
HD payout 65.6%
payout-ratio pressure
rises · tighter buyback $
HD leverage
higher payout · higher multiple
bears more payout pressure
re-accelerates, less leverage
LOW leverage
lower payout · lower multiple
dragged, but less payout strain
captures most operating leverage