June 2025 Furniture Insights Report From Smith Leonard
Furniture World News Desk
New orders were down 9% in April 2025 compared to April 2024. New orders were also down 7% compared to the prior month of March 2025. Accordingly, year to date through April 2025, new orders are now down 4% compared to 2024.
Shipments were down 2% in April 2025 compared to April 2024. Shipments were also down 4% compared to the prior month of March 2025. However, year to date through April 2025, shipments remain flat compared to 2024.
April 2025 backlogs were down 10% compared to April 2024, and down 2% from March 2025.
Receivable levels were down 4% from March 2025, and down 1% from April 2024.
Inventories and employee/payroll levels are again materially in line with recent months and the prior year, However, with the gradual decline in employees, it does appear companies are allowing some normal attrition to occur without rushing to find replacements.
National
Consumer Confidence
The Conference Board Consumer Confidence Index® deteriorated by 5.4 points in June, falling to 93.0 (1985=100) from 98.4 in May.
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell 6.4 points to 129.1.
The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell 4.6 points to 69.0, substantially below the threshold of 80 that typically signals a recession ahead.
“Consumer confidence weakened in June, erasing almost half of May’s sharp gains,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. “The decline was broad-based across components, with consumers’ assessments of the present situation and their expectations for the future both contributing to the deterioration. Consumers were less positive about current business conditions than May. Their appraisal of current job availability weakened for the sixth consecutive month but remained in positive territory, in line with the still-solid labor market. The three components of the Expectations Index—business conditions, employment prospects, and future income— all weakened. Consumers were more pessimistic about business conditions and job availability over the next six months, and optimism about future income prospects eroded slightly.”
June’s retreat in confidence was shared by all age groups and almost all income groups. It was also shared across all political affiliations, with the largest decline among Republicans.
Purchasing plans for cars were steady at the highest level since December 2024, while purchasing plans for homes declined. Compared to May, more consumers were undecided about plans to buy big-ticket items overall. Buying plans for most appliances were slightly up while plans to buy electronics goods were down. Consumers’ intentions to purchase more services in the months ahead weakened compared to May, with almost all services categories declining. Dining out remained number one among spending intentions in services. It was one of the few categories to see spending intentions rise in June, along with motor vehicle services, museum/historic sites, and fitness. Vacation intentions were unchanged overall in the month. More consumers planned to travel abroad while intentions to travel in the US declined.
Housing
Existing-home sales rose in May, according to the National Association of REALTORS®. Sales elevated in the Northeast, Midwest and South, but retreated in the West. Year-over-year, sales progressed in the Northeast and Midwest but contracted in the South and West.
“The relatively subdued sales are largely due to persistently high mortgage rates. Lower interest rates will attract more buyers and sellers to the housing market,” said NAR Chief Economist Lawrence Yun. “Increasing participation in the housing market will increase the mobility of the workforce and drive economic growth. If mortgage rates decrease in the second half of this year, expect home sales across the country to increase due to strong income growth, healthy inventory, and a recordhigh number of jobs.”
Total Existing-Home Sales for May
0.8% increase in total existing-home sales month-over-month to a seasonally adjusted annual rate of 4.03 million.
0.7% decrease year-over-year, sales declined 0.7% (down from 4.06 million in May 2024).
Single-Family-Homes Sales in May
1.1% increase in sales to a seasonally adjusted annual rate of 3.67 million, up 0.3% from May 2024.
$427,800: Median home price in May, up 1.3% from May 2024.
Condominiums and Co-ops Sales in May
2.7% decrease in sales to a seasonally adjusted annual rate of 360,000 units, down 10.0% from May 2024.
$371,300: Median price, up 0.7% from May 2024.
Mortgage Rates
Sales of new single-family houses in May 2025 were at a seasonally-adjusted annual rate of 623,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 13.7% below the April 2025 rate of 722,000, and is 6.3% below the May 2024 rate of 665,000.
Compared to May 2024 on a seasonally-adjusted basis, sales were down 6.3% overall with sales also down 15.5% in the South and down 3.7% in the Midwest, but up 8.9% in the West and up 48.0% in the Northeast.
Other
Real gross domestic product (GDP) decreased at an annual rate of 0.5% in the first quarter of 2025 (January, February, and March), according to the third estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased 2.4%.
The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending. These movements were partly offset by increases in investment and consumer spending.
Sales at furniture and home furnishings stores in May 2025 were up 1.2% compared to April 2025 on a seasonally-adjusted basis, and up 8.8% from May 2024. Year to date on a non-adjusted basis, sales were up 6.8% (6.2% last month).
Thoughts
This month saw Consumer Confidence wane, reversing last month’s gains as the economy continues to deal with a high-level of general uncertainty. Specifically, the related Expectations Index continues to signal a possible recession ahead. And while not necessarily pervasive throughout the entire industry, some segments are likely in a mini-recession already, given how the furniture industry is typically one of the first to feel the impact of such economic effects.
While we wait to get a final determination on tariff levels, Furniture Today reported that 72% of small to medium home furnishings companies say they’ve already experienced a decrease in sales due to tariffs. This seems consistent with the 4% year-to-date average decline in new orders we’re seeing for participants in our survey, as well as the average 2% decline in revenues for a representative group of publicly-traded furniture retailers and manufacturers/distributors based upon their last quarterly filings through April. That being said, there are certainly companies taking advantage of opportunities presented by the shifting landscape to add market share, and we continue to see announcements of new retail openings in the face of the many retail closings.
Also, there are still some positive factors with housing inventory, steady employment, container rates, and the stock market, which has remained remarkably resilient in the face of these challenges. In fact, the DJIA as of 7/1/25 was 44,495, which compares rather favorably to 1/31/25 of 44,544 considering all the uncertainty and stress the market has endured in recent months.
However, the Fed has indicated that it will take a wait and see approach on the potential impact of tariffs on inflation and thus may not make any additional rate cuts through the end of the year, making it more difficult for the industry to capitalize on the increase in housing inventory in the short-term.
With the newly announced 20% Vietnam tariff potentially providing a surprise to anyone expecting 10% or less and the normally leaner summer months ahead, it could be a bumpy ride for a little while as these issues fully settle themselves out and business returns to “normal,” hopefully sooner than later. However, as we’ve said before, the industry has managed through similar issues in the past and will ultimately persevere again.
Mark Laferriere, Assurance Partner
Mark has nearly 25 years of experience working in broad-based public accounting. He is an integral member of the firm’s Furniture practice group and provides various assurance services for manufacturing, distribution, and transportation clients. He is also a member of the Employee Benefit Plan group.
This Furniture Insights® newsletter report has been re-published with the permission of Smith Leonard PLLC an independent member of the BDO Seidman Alliance.
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