A frozen housing market keeps 2026 a share-gain year for furniture

The US home sector entered 2026 as the weak spot of retail. According to Commerce Department data cited by Retail Dive, home was the only major retail category to post year-over-year declines in January 2026, extending a stretch of soft demand that has persisted since the pandemic-era buying surge faded.

Housing is the engine, and it is stalled

Furniture demand tracks housing turnover, and turnover has frozen. The National Association of Realtors reported existing-home sales down 4.4% year over year and 8.4% month over month in January 2026. The housing market is just stuck in neutral, Emarketer principal analyst Zak Stambor told Retail Dive, pointing to insufficient inventory and elevated interest rates limiting home turnover. When people are not moving, they are not furnishing new spaces, and replacement purchases of pandemic-era furniture are doing much of the work that new-home demand used to.

The demand freeze is compounded by uncertainty on the cost side. Section 232 tariffs on wood products and furniture sit at 25% with scheduled increases hanging over 2027, and James Gellert, executive chair of financial-health rating firm RapidRatings, told Retail Dive that haphazard policy changes make systemic supply chain adjustments extremely difficult. Kearney partner Michael Brown made the consumer-side version of the same point: uncertainty is driving hesitation about purchase timing and product selection. A shopper who cannot guess whether a sofa will cost more or less in six months often just waits.

Consumers who do spend are trading down. Retail Dive notes Ikea is seeing customers shift toward smaller projects like organization systems rather than full renovations, and the retailer is leaning into value positioning, which it says historically performs well in recessionary stretches. Forecasts reflect the caution, with consumer spending on furniture and bedding projected to rise only around 1.9% in 2026 and broader furniture store sales up near 1.1%, while cost pressures from tariffs, foam, and freight squeeze margins from the other side.

The spring data confirms the freeze has carried through. US Census Bureau advance estimates put furniture and home furnishings store sales down 3.6% year over year in April and down 2% from March, according to Home News Now, leaving furniture among the weakest retail categories, ahead of only department stores, even as electronics and appliances grew 7.6%. Consumers are still prioritizing other purchases over big-ticket home goods, and the stagnant housing market plus rising household debt that Home News Now cites are the same forces that defined January.

Strength is concentrated

The pain is not evenly spread. Gellert expects more retailer bankruptcies in 2026 than in 2025, and the casualty list is already growing: At Home and Value City parent American Signature have failed, and Bestar's group followed this spring (its collapse and partial rescue is covered separately). RapidRatings' data drew the dividing line clearly, with Williams-Sonoma and Ethan Allen showing strong financial health while Wayfair and Sleep Number sat in the high-risk category. Yet position on that list is not destiny: Wayfair posted its first annual revenue gain since the pandemic and has since returned to active-customer growth, and Bob's Discount Furniture filed to go public. Stambor's summary to Retail Dive captures the year: the strong will get stronger, and the weak will get weaker.

Why it matters: When category growth is flat to negative, a rising tide is not going to lift anyone. Gains have to be taken from someone else, which puts a premium on execution, the right price, the right content, and reliable fulfillment on the marketplaces where shoppers still are. The concentration math also changes supplier risk: a brand's wholesale accounts and channel partners are on the same sorting curve, and the casualty list above is a reminder to know which side of it each partner sits on.

What it means for our partners: In a flat market, disciplined pricing, sharp listings, and dependable delivery separate the brands that take share from the brands that quietly give it up.