Timothy Ellsberry, an Atlanta-based home builder, is impressed with Home Depot’s latest AI-powered efforts to attract skilled workers. Ellsberry joined Home Depot’s Pro program in late 2024. He told CNBC that he has reviewed but not yet adopted the company’s growing suite of digital tools — including the AI-powered BluePrint Takeoffs, which launched back in November. The tool quickly creates inventories – or complete lists of materials and resources needed to create project quotes – and seamlessly allows contractors to purchase everything directly from Home Depot. “As they developed their program, I could see myself moving away from CRM [customer relationship management] that I use a cheaper option because Home Depot makes these resources. They add it on their platform more or less for free,” said Ellsberry, 38, founder and lead developer of ERP Legacy Developments, which operates in Home Depot’s backyard. Home Depot is also headquartered in Atlanta. “If they add tools for us, it eliminates some of the additional costs on the expenses we have,” Ellsberry added, pointing to potential annual savings of $3,300 if he were to use Blueprint Takeoffs. As they build I could imagine deviating from the CRM I use. Amid a slower-than-expected housing market recovery that has pressured the stock, Home Depot has been positioned to tap into a larger customer base with its 2024 acquisition of SRS Distribution conversion, as this then leads to higher sales.” Rowe declined to reveal conversion metrics, but told CNBC that Home Depot is seeing a “nice increase in engagement with the tool” as more launches roll out.[We] “Definitely expect that conversion to improve,” he said. “But the real question is whether Home Depot’s new tools will result in higher margins for the home improvement market compared to the third quarter of 2024, which was in line with our expectations,” Chief Financial Officer Richard McPhail said on the company’s most recent earnings call. For full-year 2025, the company expects about 33.2%. However, Home Depot, which accounts for about 55% of sales, also has higher-margin supplies such as gloves, masks, tools and other items needed to keep projects going, Bellinger said. Ellsberry’s purchasing behavior reflects this dynamic. “That’s framing, drywall, shingles, backer boards, caulk, mud,” Ellsberry said He has also worked with AI home renovation startup Kai, which allows contractors to capture photos of a job site and quickly create a real-time list of Home Depot items with prices Still in testing mode, Rowe said, but with about 40 to 50 active customers, Home Depot is pushing its pro agenda against an unfavorable macroeconomic backdrop, hampered by elevated mortgage rates, in anticipation of the Federal Reserve’s first rate cut in 2025. Unfortunately, that cut, as well as two others in October and December, did not result in a meaningful reduction in long-term bonds. The yields that drive mortgage rates were a repeat of 2024, when multiple Fed rate cuts provided little relief, in part due to President Donald Trump’s efforts to cut Fed rates. Trump is expected to nominate a more dovish Fed chair in May. The president, whom Trump nominated in his first term, is under investigation in connection with the $2.5 billion renovation of the central bank’s headquarters. Regardless of the outcome, Trump will almost certainly take the post with a mandate to cut interest rates to around $380 in 2026. Last Thursday, Trump ordered his “representatives” to buy $200 billion in mortgage bonds to reduce interest rates on a 30-year mortgage by 22 basis points to 5.99%, which is the low reached on February 2, 2023, according to Mortgage News Daily, and to ban large institutional investors from buying more single-family homes, which he says will free up housing supply and increase affordability. We bought 25 more Home Depot shares at $344 each on earnings date November 18th as management not only missed adjusted earnings per share and same-store sales, but also lowered its full-year guidance by 5%. On a year-over-year basis, we expected fourth-quarter earnings to decline approximately 2%. However, at that time we lowered our price target for Home Depot from $440 to $420. (Jim Cramer’s Charitable Trust is long stock.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a transaction, before he buys or sells any stock in his charitable trust’s portfolio PRIVACY POLICY, ALONG WITH OUR DISCLAIMER, THERE ARE NO FIDUCTIVE OBLIGATIONS OR OBLIGATIONS IN RECEIVING YOUR INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB DOES NOT GUARANTEE ANY SPECIFIC RESULTS OR PROFITS.