Furniture Stores NAICS 449110

Jan 20, 2026 - Furniture Demand Shifts with Reshaped Housing Market

• As the US housing market enters 2026, modest home sales growth and elevated mortgage rates are reshaping furniture demand, according to a report in Furniture Today. Realtor.com projects existing-home sales to rise just 1.7% in 2026, with mortgage rates averaging about 6.3%, reinforcing a “lock-in” effect that limits mobility. Instead of full-home furnishing tied to moves, furniture spending is shifting toward targeted, room-by-room upgrades as homeowners stay put and reinvest. Strong home equity supports demand, but consumers are cautious, prioritizing durability, comfort and long-term value over trend-driven purchases. Financing flexibility remains critical as affordability pressures persist. Demographic shifts, including millennials accounting for nearly 30% of buyers and growing multigenerational households, are increasing demand for adaptable, high-quality furnishings. Overall, industry growth is steady rather than explosive, driven by intentional investment in existing homes rather than housing turnover.
• While five services industries reported contraction in December, 11 industries reported growth, including the Retail Trade industry, according to an ISM Services PMI Report. Executives in the Retail Trade industry reported increases in business activity, new orders, employment, prices paid for materials and services, and inventories, along with decreases in new export orders, imports, and order backlogs in December. Other industries reporting growth during the period were Finance & Insurance; Accommodation & Food Services; Transportation & Warehousing; Arts, Entertainment & Recreation; Mining; Health Care & Social Assistance; Information; Wholesale Trade; Public Administration; and Utilities. Industries reporting contraction during the period include Management of Companies & Support Services; Professional, Scientific & Technical Services; Agriculture, Forestry, Fishing & Hunting; Educational Services; and Construction. Overall economic activity in the services sector continued to expand in December, registering 54.4%.

• According to the CNBC/NRF Retail Monitor, furniture and home furnishings stores lagged behind broader retail gains in December 2025. Core retail sales rose 1.6% month over month and 3.5% year over year, reflecting results in line with the NRF retail forecast. However, furniture and home furnishings stores posted a 0.33% monthly increase (seasonally adjusted) and a 0.82% annual decrease (unadjusted), making them one of only two categories to contract. Building and garden supply stores fell 5.3% year over year, and electronics and appliance stores fell 0.09% year over year. In contrast, categories such as clothing (6.1% year over year), sporting goods, hobby, music, and book stores (5.1%), and digital products (3.6% year over year) saw strong growth The data, based on Affinity Solutions’ anonymized card transactions, highlights competitive pressures facing furniture retailers.
• US consumer confidence declined for a fifth consecutive month in December 2025, creating a more challenging demand backdrop for furniture and home furnishings retailers that rely on discretionary, big-ticket spending. The Conference Board Consumer Confidence Index fell to 89.1, driven by a sharp deterioration in perceptions of current business and labor market conditions, while expectations remained at levels historically associated with recession risk. For US furniture and home furnishings retailers, the data point to continued near-term pressure: homebuying expectations softened, plans to purchase household appliances declined, and consumers grew more hesitant about big-ticket purchases overall. Although lower inflation expectations and recent Federal Reserve rate cuts offer some longer-term support, consumers’ views of their current financial situation turned negative for the first time in nearly four years. Spending continues to shift toward necessities and lower-cost options, suggesting furniture retailers may face subdued demand, heightened price sensitivity, and increased reliance on promotions through early 2026.