(Reuters) -Lowe's cut its annual profit and sales forecasts on Tuesday, joining bigger rival Home Depot in issuing bleak projections as economic concerns keep consumers from splurging on pricy home improvements.

Higher borrowing and mortgage rates have led to subdued demand for new homes - a factor that weighed on sales at Lowe's and Home Depot.

Placer.ai data showed that fewer new home sales in May and June pressured store traffic for the home improvement companies.

Home Depot also forecast a decline in annual profit and a bigger drop in annual comparable sales last week, signaling that revival of consumer demand would take a while.

Unusually warm weather also dented sales for both home improvement companies as consumers put off renovation projects for their lawns and homes this spring season.

Lowe's second-quarter comparable sales fell 5.1%, more than analysts' expectation of a 4.11% drop, per LSEG data.

The company now expects full-year adjusted earnings per share of about $11.70 to $11.90, down from about $12.00 to $12.30.

It sees a 3.5% to 4% drop in comparable sales for 2024, compared with its earlier forecast of a 2% to 3% drop.

Shares of the company were down marginally in premarket trading.

(Reporting by Juveria Tabassum; Editing by Shinjini Ganguli)