May 2025 Furniture Insights Report From Smith Leonard

Furniture World News Desk on 6/3/2025

Executive Summary

New orders were up 1% in March 2025 compared to March 2024. New orders were also up 1% compared to the prior month of February 2025. However, year to date through March 2025, new orders are down 2% compared to 2024.

Shipments were up 1% in March 2025 compared to March 2024. Shipments were up 6% compared to the prior month of February 2025, which was likely a function of the prior short month (when down 8% to January). Year to date through March 2025, shipments remain flat compared to 2024.

March 2025 backlogs were down 6% compared to March 2024 (same as last month), and down 1% from February 2025 as new orders were relatively consistent with shipments during the month.

Receivable levels were down 3% from February 2025, and down 2% from March 2024.

Inventories were up 1% from February 2025 and up 3% from March 2024, which are materially in line with prior periods and current operational levels.

Inventories and employee/payroll levels are again materially in line with recent months and the prior year.

National

Consumer Confidence

The Conference Board Consumer Confidence Index® increased by 12.3 points in May to 98.0 (1985=100) up from 85.7 in April.

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—rose 4.8 points to 135.9.

The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—surged 17.4 points to 72.8, but remained below the threshold of 80, which typically signals a recession ahead.

“Consumer confidence improved in May after five consecutive months of decline,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. “The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards. The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index—business conditions, employment prospects, and future income—rose from their April lows. Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects. Consumers’ assessments of the present situation also improved. However, while consumers were more positive about current business conditions than last month, their appraisal of current job availability weakened for the fifth consecutive month.”

Compared to April, purchasing plans for homes and cars and vacation intentions increased notably, with some significant gains after May 12. Plans to buy big-ticket items—including appliances and electronics—were also up. Likewise, consumers’ intentions to purchase more services in the months ahead, with almost all services categories rising. Dining out remained number one among spending intentions, followed by streaming services, while plans to spend on movies, theater, live entertainment, and sporting events increased the most over last month.

Housing

Existing-home sales slowed in April, according to the National Association of REALTORS®. Sales dipped in the Northeast and West, grew in the Midwest and were unchanged in the South. Year-over-year, sales declined in three regions and remained steady in the Northeast.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops –slipped 0.5% from March to a seasonally adjusted annual rate of 4.00 million in April. Year-over-year, sales descended 2.0% (down from 4.08 million in April 2024).

Single-family home sales waned 0.3% to a seasonally adjusted annual rate of 3.63 million in April, down 1.4% from the prior year. The median existing single-family home price was $418,000 in April, up 1.7% from April 2024.

Existing condominium and co-op sales faded 2.6% in April to a seasonally adjusted annual rate of 370,000 units, down 7.5% from one year ago. The median existing condo price was $370,100 in April, up 1.4% from the previous year ($364,900).

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.81% as of May 15. That’s up from 6.76% one week before but down from 7.02% one year ago.

Sales of new single-family houses in April 2025 were at a seasonally-adjusted annual rate of 743,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 10.9% above the March 2025 rate of 670,000, and is 3.3% above the April 2024 rate of 719,000.

Compared to to April 2024 on a seasonally-adjusted basis, sales were up 3.3% overall with sales also up 6.5% in the South, up 1.2% in the Midwest, up 1.3% in the West, but down 25.8% in the Northeast.

Other

Real gross domestic product (GDP) decreased at an annual rate of 0.2% in the first quarter of 2025 (January, February, and March), according to the second estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased 2.4%.

Sales at furniture and home furnishings stores in April 2025 were up less than 0.1% compared to March 2025 on a seasonally adjusted basis, but up 7.8% from April 2024. Year to date on a non-adjusted basis, sales were up 6.2% (4.9% last month).

According to our latest survey of residential furniture manufacturers and distributors, new orders were up 1% in March 2025 compared to March 2024. Approximately two-thirds of participants reported increases versus decreases in March 2025 compared to a year ago.

New orders were also up 1% compared to the prior month of February 2025.

Year to date through March 2025, new orders are down 2% compared to 2024 (down 4% last month).

March 2025 shipments were up 1% compared to March 2024, and up 6% compared to February 2025. Consistent with new orders, shipments in March 2025 were up for approximately two-thirds of the participants compared to March 2024. Year to date through March 2025, shipments remained flat compared to 2024.

March 2025 backlogs were again down 6% compared to March 2024, and down 1% from February 2025 as new orders and current shipments were relatively in sync.

Receivable levels were down 3% from February 2025, and down 2% with March 2024, which seems to be a reversal of last month’s apparent timing difference driven increase.

Inventories were up 1% from February 2025 and up 3% from March 2024, which are in line with prior periods and current operational levels.

The number of factory and warehouse employees were down 4% from March a year ago, but again relatively even with the prior month (down 1%).

Payroll expense was up 5% in March 2025 compared to February 2025, presumably due to the prior short month (down 7% last month). March 2025 payroll expense was down only 1% compared to March 2024. However, year to date through March 2025, payroll expense was up 2%.

Thoughts

This month we saw another tariff reprieve as negotiations continue, which hopefully provides some guidance to the industry as to how the situation is going to ultimately play out. Not surprisingly, with this reversal indicating an eventual resolution (or at least short-term stability), consumer confidence rebounded after 5 months of declines and respondents indicated an increase in purchasing plans for homes and other big-ticket items.

That is welcome news to the 75% of the Top 100 retailers that posted declines in 2024 as reported recently by Furniture Today. However, the U.S. Census Bureau reported that year-to date sales at furniture and home furnishings stores through April 2025 were approximately 8% higher than the same period of 2024. That 8% is ahead of the relatively flat average orders and shipments reported by the participants in our monthly stats through March 2025, but hopefully indicates some help is on the way in the form of additional activity, whether driven by looming tariffs or pent-up demand. Early returns on Memorial Day activity also seem generally positive based upon industry reports.

So, with some stock market stability, a slow shift in the housing market, manageable inflation, and a rate cut (or two) later in the year, hopefully the worst of the uncertainty and volatility is behind us and the industry as a whole can adjust accordingly and look forward to a bit of a rebound in the second half of the year.

Mark Laferriere, Assurance Partner