diff --git a/nixos/modules/config/update-users-groups.pl b/nixos/modules/config/update-users-groups.pl
index 7c6851473f42..f0b692a759d1 100644
--- a/nixos/modules/config/update-users-groups.pl
+++ b/nixos/modules/config/update-users-groups.pl
@@ -234,7 +234,7 @@ foreach my $u (@{$spec->{users}}) {
 
     # Ensure home directory incl. ownership and permissions.
     if ($u->{createHome} and !$is_dry) {
-        make_path($u->{home}, { mode => oct($u->{homeMode}) }) if ! -e $u->{home};
+        make_path($u->{home}, { mode => 0755 }) if ! -e $u->{home};
         chown $u->{uid}, $u->{gid}, $u->{home};
         chmod oct($u->{homeMode}), $u->{home};
     }
diff --git a/nixos/tests/user-home-mode.nix b/nixos/tests/user-home-mode.nix
index 070cb0b75cc9..2d6d1af3f391 100644
--- a/nixos/tests/user-home-mode.nix
+++ b/nixos/tests/user-home-mode.nix
@@ -12,6 +12,12 @@ import ./make-test-python.nix ({ lib, ... }: {
       isNormalUser = true;
       homeMode = "750";
     };
+    users.users.carol = {
+      initialPassword = "pass3";
+      isNormalUser = true;
+      createHome = true;
+      home = "/users/carol";
+    };
   };
 
   testScript = ''
@@ -23,5 +29,7 @@ import ./make-test-python.nix ({ lib, ... }: {
     machine.send_chars("pass1\n")
     machine.succeed('[ "$(stat -c %a /home/alice)" == "700" ]')
     machine.succeed('[ "$(stat -c %a /home/bob)" == "750" ]')
+    machine.succeed('[ "$(stat -c %a /users)" == "755" ]')
+    machine.succeed('[ "$(stat -c %a /users/carol)" == "700" ]')
   '';
 })