Hardware, Plumbing & HVAC Distributors NAICS 4237

Jun 23, 2026 - Fitch Downgrades Outlook for Builders, Building Products

• Fitch Ratings lowered its 2026 outlooks for US homebuilding and North American building products to deteriorating, citing weak affordability, mortgage rates near 6.5%, soft consumer sentiment, and slower housing turnover. Fitch expects new home sales to fall 2.5% in 2026, single-family starts to decline 4.5%, and remodeling demand to remain constrained, especially for big-ticket discretionary projects. The slowdown could reduce demand for new construction, renovations, and resale-driven upgrades in the hardware, plumbing, and HVAC equipment markets. However, repair, maintenance, and nondiscretionary categories, including plumbing repair, roofing repair, coatings, HVAC replacement parts, and essential equipment, should prove more resilient. Distributors may face lower volumes, margin pressure from inflation, and cautious customer spending, partly offset by nonresidential activity in data centers and power infrastructure.
• Facilities Dive reports that the US Supreme Court sided with the Trump administration and gas industry groups in a dispute over DOE efficiency rules for non-condensing commercial gas water heaters and residential gas furnaces. The court sent the case back to a federal appeals court, leaving the 2023 and 2024 rules in legal limbo while DOE considers whether to rewrite them. For HVAC and plumbing equipment distributors, the uncertainty could make it harder to plan inventory, advise customers, and prepare for future replacement demand. If the rules eventually limit non-condensing appliances, some customers may face higher equipment costs or expensive venting retrofits, especially in buildings that rely on traditional vertical chimneys.

• Rising costs for copper, lumber, diesel, aluminum, and other building materials are worsening affordability challenges in the US housing market, according to The Wall Street Journal. Supply disruptions, tariffs, the war in Iran, and strong demand from data centers and electric-vehicle manufacturers have pushed prices higher, increasing construction and renovation costs. The National Association of Home Builders said 70% of builders surveyed in April struggled to price homes due to uncertainty about material costs. Higher fuel prices have also raised shipping costs. Mortgage rates reached 6.51% the week of May 21, 2026, according to Freddie Mac, adding pressure on buyers and builders. Industry executives warned that continued increases in material and financing costs could slow new housing development. Rising costs for copper, lumber, diesel, aluminum, and other building materials are worsening affordability challenges in the US housing market, according to The Wall Street Journal. Supply disruptions, tariffs, the war in Iran, and strong demand from data centers and electric-vehicle manufacturers have pushed prices higher, increasing construction and renovation costs. The National Association of Home Builders said 70% of builders surveyed in April struggled to price homes due to uncertainty about material costs. Higher fuel prices have also raised shipping costs. Mortgage rates reached 6.51% the week of May 21, 2026, according to Freddie Mac, adding pressure on buyers and builders. Industry executives warned that continued increases in material and financing costs could slow new housing development.
• Home remodeling spending growth is expected to slow significantly early in 2027, according to the Leading Indicator of Remodeling Activity (LIRA) report released in May by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase 1.8% to $516 billion in the second quarter of 2026, compared to Q2 2025. In the third quarter of 2026, remodeling spending will trend slightly upward to $518 billion, up 2.4% from Q3 2025. Spending will then remain flat at $518 billion in Q4 2026, up 1.8% from Q4 2025. In the first quarter of 2027, year-over-year spending is forecast to rise just 0.5% to $523 billion. Remodeling permitting and building product sales have remained flat recently, but homeowners are expected to maintain spending near 2025 levels. Remodeling spending is likely to remain subdued, barring a turnaround in the construction sector.