Welcome to Furniture Industry News for Wednesday, May 28, 2025.

I'm here to bring you the key stories and updates you need to know to stay current in our industry.

Let's start with some positive news that could impact consumer spending.

Consumer confidence jumped significantly in May, climbing 12.3 points to 98 according to the Conference Board.

This is a big jump from april's reading of 85.7.

What's interesting is that about half of the survey responses came after May 12, which when the US and China announced a pause on some tariffs.

The Present situation index rose nearly 5 points to 13.5.9 and the expectations index shot up over 17 points to 72.8.

This boost in confidence is happening across all age groups, income levels and political affiliations, though Republicans showed the strongest improvements.

More consumers are now expecting stock prices to increase over the next 12 months.

That number went from about 38% in April to 44% in May.

Just as importantly for our industry, consumer purchasing plans for homes, cars and vacations all increased, with significant gains happening after that May 12th trade announcement.

The report noted that while inflation and higher prices remain concerns for consumers, there were mentions of easing inflation and lower gas prices.

This could be good news for furniture demand as consumers feel more confident about their financial situation.

Speaking of housing, which directly impacts our furniture business, the housing market showed mixed signals in April.

Existing home sales declined 2% compared to April last year, dropping to a seasonally adjusted rate of 4 million units.

Sales also fell half a percent from March.

However, median home prices rose 1.8% to $414,000, which the national association of Realtors says is an all time high for April.

What's particularly noteworthy is that inventory levels increased nearly 21% year over year, reaching 1.45 million units.

That represents a 4.4 month supply, up from 3.5 months in April 2024.

While we're still in what the NAR calls a mild seller's market, the higher inventory levels mean consumers are in a better position to negotiate.

This could lead to more home sales down the road, which would be positive for furniture demand.

The regional breakdown shows sales holding steady in the Northeast but declining in the South, Midwest and West.

Single family home sales totaled 3.63 million units, down 1.4% from last year, while condo and co OP sales dropped 7.5% to 370,000 units.

First time buyers made up 34% of sales, which is up slightly from last year.

Now let's talk about retail expansion that's making waves in our industry Wayfair announced It's opening its third large format store, this time in Yonkers, New York.

Set to open in early 2027, this 114,000 square foot location will be at the Ridge Hill lifestyle center about 18 miles from New York City.

The success of Wayfair's first large format store in Wilmette, Illinois is pretty impressive.

Since opening a year ago, it's welcomed over 720,000 visitors and more than half of the purchasing customers were new to the Wayfair brand.

That's a significant customer acquisition achievement.

The company also has a 150,000 square foot Atlanta location opening next year.

These stores feature 19 departments organized by style, showcasing furniture, decor, outdoor living and home improvement products.

They're also highlighting Wayfair's verified products which have been carefully reviewed for quality and value.

What's smart about the Yonkers location is its proximity to Wayfair's New Jersey fulfillment center, which will enable fast delivery of large items to enhance the in store experience.

Wayfair is clearly betting big on physical retail.

They're also debuting their first brick and mortar perigold store in Houston in June.

With $11.9 billion in net revenue for the 12 months ended March 31, they have the resources to make this expansion work.

Let's shift to international trade, which affects many furniture companies importing products or materials.

President Trump initially threatened a 50% tariff on European Union goods starting June 1, which sent shockwaves through many industries.

However, after a phone call with European Commission President Ursula von der Leyen, Trump agreed to extend the deadline to July 9th to allow for negotiations.

This extension is significant for furniture companies that import from EU countries or use EU materials in their manufacturing.

A 50% tariff would dramatically impact costs and pricing strategies.

The extension gives companies more time to plan and potentially negotiate alternatives, but the uncertainty remains.

European markets rallied after the extension was announced, showing how much this decision affects business confidence.

The furniture industry should keep a close eye on these negotiations.

Any tariff implementation could affect everything from component costs to finished goods pricing, depending on your supply chain relationships with European suppliers.

While we're on the topic of trade and supply chains, port slowdowns continue to impact U.S.

workers and smaller retailers.

Shipping delays can significantly affect furniture companies, especially those relying on just in time inventory management or seasonal product launches.

These delays often hit smaller retailers harder than large companies that have more resources to manage disruptions.

In corporate news, William Sonoma acquired the intellectual property of Dormify, the college dorm furnishing company.

While specific terms weren't disclosed, this acquisition shows how established home furnishing companies are looking to expand into specialized market segments.

Dormify had carved out a niche in the college market and Williams Sonoma's acquisition could help them reach younger consumers.

Looking at broader retail performance, Macy's Q1 results topped expectations, which is encouraging for the overall retail environment.

Strong performance at major retailers like Macy's often indicates better consumer spending patterns that can benefit furniture sales through their home departments and increased foot traffic.

However, the overall furniture retail landscape continues to face challenges.

Industry reports show that many furniture retailers are still struggling with sales declines compared to pre pandemic levels.

Home sales have been running at about 75% of normal activity for the past three years, even with 7 million jobs added to the economy.

This creates pent up demand that could be released if mortgage rates decline meaningfully.

The current mortgage environment is worth noting for furniture professionals.

The 30 year fixed rate mortgage averaged 6.81% as of mid May, down from 7.02% a year earlier, but still elevated compared to recent years.

Lower mortgage rates could unlock more home sales, which typically drive furniture purchases.

Properties are staying on the market slightly longer 29 days in April compared to 26 days last year, which could indicate a more balanced market.

Developing cash sales accounted for 25% of transactions, down from 28% last year, suggesting more traditional financing is being used.

As we wrap up today's episode, the key takeaways for furniture industry professionals include watching the consumer confidence Trends, monitoring the July 9 EU tariff deadline, keeping an eye on Wayfair's physical retail expansion success, and preparing for potential changes in housing market dynamics as inventory levels increase.

The combination of improved consumer confidence, higher housing inventory and ongoing trade negotiations creates both opportunities and challenges for our industry.

Companies that stay agile and informed will be best positioned to navigate these changing conditions.

That's all for today's furniture industry news.

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Thanks for listening and we'll see you next time.