The US housing market has cooled down significantly! The home furnishing category will continue to be sluggish!

It is learned that according to foreign media reports, due to the sharp cooling of the housing market, Americans' demand for household goods has dropped sharply.

According to data released by the National Association of Realtors (NAR) in mid-August, the annualized sales of second-hand homes in July fell 5.9% month-on-month to 4.81 million units, and sales fell 22.4% year-on-year, hitting the lowest level since May 2020. Not only that, U.S. home sales have fallen for seven consecutive months.

Soaring borrowing costs have deterred many potential homebuyers. According to data released by Freddie Mac on September 22, the average interest rate for a 30-year mortgage in the United States reached 6.29%, the highest level since October 2008.

With fewer potential homebuyers, some people who were originally interested in buying a home have also put off listing their homes. According to Zillow data, new listings in the United States fell by about 23% year-on-year in August. In addition, many tenants in the United States chose to renew their leases and stay put to avoid soaring rental costs. According to Redfin data, the median rent in the United States in August increased by 11% year-on-year to a record high of $2,039.

As the U.S. housing market has cooled sharply, home furnishings retailers have also been hit because when people move, they typically buy items such as home decor, furniture and appliances. But as more people choose to stay put, coupled with continued high inflation, U.S. home sales have fallen into a slump.

It is reported that just last week, the Federal Reserve announced that it would raise interest rates by another 0.75 percentage points and hinted that it might raise interest rates several more times, even though these hikes might increase the risk of economic recession.

According to a report from the Congressional Budget Office (CBO), inflation has hit middle-income Americans the hardest. A report from First Insight also stated that 23% of American consumers are cutting back on spending on home decoration and furniture.

Niraj Shah, CEO of U.S. home furnishings e-commerce company Wayfair, said in August that Americans have less disposable income due to inflation, fuel and grocery prices taking a larger share of their wallets. In the past few months, Wayfair has seen customers shift their purchases from goods to services.

It is learned that during the outbreak, Americans were trapped at home due to the blockade, which led to a surge in demand for home improvement, ushering in spring for home furnishing retailers such as Wayfair, Williams-Sonoma and RH. But now, with the relaxation of epidemic prevention policies and the suppression of inflation, the demand for home improvement has plummeted, and these retailers have suffered heavy losses.

According to the U.S. Department of Commerce, in the first eight months of this year, sales in the U.S. home furnishing and home furnishing industry increased by only 1.4%, and sales of household appliances fell by 5.0%.

RH CEO Gary Friedman said the U.S. housing market is in a recession and has only just begun to decline. It is expected that home furnishing retailers will face another 12-18 months of difficult times.

Editor ✎ Nicole/

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