Tile and Terrazzo Contractors NAICS 238340

Jul 7, 2026 - New Home Sales Drop

• New single-family home sales fell 7.3% month-over-month and were down 6.8% year-over-year in May 2026, according to the US Census Bureau. May’s total new home sales reached 580,000 units. Increased inflation, high mortgage rates, and economic uncertainty are keeping many would-be buyers on the sidelines, according to the National Association of Home Builders (NAHB). As new home sales soften further, stockpiles of completed homes continue to stack up. Inventories of unsold new homes reached 496,000 units in May, up 2.3% compared to April, but down 1.4% from May 2025. The months' supply of new homes was 10.3 months in May. The US housing market is generally considered balanced with five to six months of inventory.
• Demand for building design services declined in May 2026 over the prior month, as architectural billings remain soft, according to a June report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 44.5 in May from April's reading of 48.3. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 49.4 in May, down from 57.7 in April, and the index for the value of new design contracts decreased from 48.0 to 45.0. The AIA’s Chief Economist, Richard Branch said, "The uncertainty created by the Iran conflict, and substantially higher energy costs, weighed on architect billings in May. Higher interest rates, rapidly rising material costs, and continued labor shortages all contributed to softer demand."

• 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.
• 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.