The Line Card Signal (February 20, 2026)

Housing transaction volume posted one of its weakest January readings in years, consumer purchase expectations have fallen below levels historically associated with recession risk, and household purchasing power is being eroded by tariff-driven cost increases. According to traditional leading indicators, a pullback is underway.

At the same time, the channel is behaving differently. Serious buyers wrote orders at Las Vegas Winter Market. Lightovation reported its strongest attendance in multiple years.

Existing Home Sales Drop 8.4%

Existing home sales declined 8.4% month-over-month to a 3.91 million annualized rate in January 2026, falling 4.4% year-over-year across all four U.S. regions, according to the National Association of Realtors. Median home prices rose 0.9% year-over-year to $396,800 (the 31st consecutive month of price appreciation_ while inventory reached a 3.7-month supply and the Housing Affordability Index improved for the seventh straight month to 116.5. Mortgage rates fell to their lowest level since September 2022, yet transaction volume did not respond, as homeowners holding sub-4% rates from 2020–2021 remain unwilling to sell into the current financing environment.

Why it matters:

• Housing turnover drives an estimated 30-40% of big-ticket furniture purchases; a sustained compression in move-in volume removes that demand from the pipeline for the duration, not just a quarter.
• The lock-in effect is structural — improving affordability and rising inventory create a setup for potential second-half recovery, but the first half is tracking soft for any brand whose demand model is anchored to residential turnover.
• The remodel and refresh cycle is absorbing displaced demand; homeowners who are not moving are investing in the spaces they occupy, which changes which categories, SKUs, and channel partners are relevant.

Sources: National Association of Realtors, Realtor.com Economic Research, NAR Economists’ Outlook, Bankrate

Consumer Purchase Expectations Fall Below the Recession Threshold While Sentiment Rises

The Conference Board Consumer Confidence Index fell to 84.5 in January 2026, its lowest reading since May 2014 and below the lows recorded during the early pandemic period. Within that index, the Expectations sub-index declined to 65.1, well below the 80-point level that historically correlates with recession risk. Separately, the University of Michigan consumer sentiment index rose for the third consecutive month to 57.3 in February, beating expectations. The divergence reflects two distinct consumer cohorts: equity-linked households, whose sentiment is tracking market performance, and middle-market households, whose purchase expectations are contracting. Retail Q1 momentum at major dealers was driven by promotions. One national chain posted 33.5% year-over-year growth at a 25% discount, indicating that middle-market volume is price-induced, not organic.

Why it matters:

• The Conference Board’s Expectations Index, not sentiment, predicts purchase behavior. A reading of 65.1 indicates that planned major purchases (including furniture) are being deferred at the middle market level.
• Promotion-driven retail growth compresses dealer margins; dealers absorbing discounts to move volume will have less open-to-buy flexibility and will increasingly require brand-level promotional support to maintain floor presence.
• The bifurcation reflects two structurally different demand environments operating simultaneously, requiring distinct positioning and support structures for premium versus value price segments.

Sources: The Conference Board, University of Michigan / Trading Economics, Furniture Today

Las Vegas Winter Market

Las Vegas Winter Market (January 25-29, 2026) continued a multi-year trend of declining overall foot traffic, but exhibitor performance data tells a different story at the account level. Matrix Furniture Group opened 192 new accounts over four days and reported performance approximately 30% stronger than High Point Market. Key accounts who had not attended in multiple years returned to the floor and wrote orders, according to Linon Home Décor. ANDMORE, the market organizer, characterized buyer engagement as strong despite the lower headcount. The pattern of fewer total attendees, higher order and account velocity among those who attended represents a structural shift in how the Las Vegas show delivers value.

Why it matters:

• ROI per attendee has increased: the buyers who committed to traveling to Vegas this cycle came with purchasing intent, which changes the calculus for brands weighing show investment against headcount trends.
• The window to convert market contacts into Q2 orders is time-compressed. Buyers who attended are ready to move, and follow-up latency on samples, pricing, and delivery timelines directly determines whether market momentum converts to revenue.
• Brands that did not maintain or invest in their Vegas presence may have missed a cycle of new account acquisition that, based on this data, was concentrated and high-quality.

Sources: ANDMORE, Furniture Today, HFB Business

Chinese Furniture Tariffs Reach ~130%

Effective tariff rates on Chinese furniture imports have reached approximately 130% through a combination of Section 232 duties (10-50%) and existing IEEPA tariffs, according to Furniture Today and Home News Now. The Commerce Secretary publicly attributed reshoring activity to tariff pressure, including in the furniture sector. However, 21% of U.S. manufacturing plants currently cannot operate at full capacity due to labor shortages, and establishing new domestic production operations requires an estimated 24-36 months, placing meaningful reshoring capacity no earlier than 2028. Meanwhile, ocean container rates have fallen sharply (Shanghai to Los Angeles is down approximately 43% year-over-year to $3,132 per 40-foot container), but domestic LTL freight costs are running 8-12% above advertised rates due to surcharges and new NMFC classification rules that took effect in December 2025, eroding ocean-side savings before the product reaches the dealer.

Why it matters:

• The reshoring narrative is running ahead of capacity reality; any operational plan that assumes domestic production as a near-term tariff mitigation strategy is working from an incorrect timeline.
• The headline decline in ocean freight rates does not accurately represent total landed cost tariff overlay plus LTL surcharges mean the actual cost-of-goods picture for imported product has changed materially from models built earlier in 2025.
• The effective trade barrier against Chinese-sourced products is now structural in scale, forcing sourcing diversification decisions (Vietnam, India, Mexico) that typically require 12-24 months of qualification lead time to execute reliably.

Sources: Furniture Today, Home News Now, MoverDB, ParcelPath, The Furnishing Report

Lightovation Posts 25% Attendance Increase

Lightovation at the Dallas Market Center reported a 25% increase in retail showroom and design professional attendance at its January 2026 show, the strongest turnout in multiple years, according to Home Accents Today. Growth was concentrated in exterior lighting and kitchen and bath categories. During the same period, Lutron Electronics announced the acquisition of Tanury Industries to expand into premium metal finishes, signaling institutional investment in category breadth rather than contraction. The attendance surge occurred against a backdrop of soft broader home furnishings traffic, making the lighting category’s performance more notable in relative terms.

Why it matters:

• A 25% attendance increase at a category-specific show is a leading indicator of specification activity. Designers and showroom buyers who attend are in active project pipelines, not browsing; this is a forward-looking demand signal, not a lagging one.
• Growth concentrated in exterior lighting and kitchen/bath directly mirrors the active remodel cycle: homeowners upgrading existing spaces, not outfitting new purchases, which is consistent with the housing transaction picture and provides channel-level confirmation of where demand is flowing.
• Lutron’s acquisition of a premium finish manufacturer reflects strategic confidence in category expansion at scale; when dominant players invest in adjacencies during a soft macro period, it typically signals a category-level conviction that is worth tracking.

Sources: Home Accents Today

Designers Expanding Into Hospitality and Multifamily

According to Business of Home’s survey of 22 industry leaders in early 2026, interior designers are deliberately expanding their practices into hospitality, multifamily residential, and out-of-state projects. The prevailing strategy is to deepen existing client relationships rather than expand client counts, resulting in fewer but larger and longer-duration projects. Designers also cited international talent acquisition and AI efficiency tools as active investments. In parallel, Hubbardton Forge expanded its Design Advisory Council with five designers drawn from Denver, Scottsdale, Nashville, Naples, and North Carolina, an expansion the manufacturer’s CEO described as shaping product development and specification strategy through direct designer partnership.

Why it matters:

• Designers moving into hospitality and multifamily are specifying at project scales that differ fundamentally from single-room residential work — order sizes, lead time expectations, sample requirements, and pricing tier structures are all different, and trade programs built for residential scale may not serve this demand.
• Fewer, larger projects per designer means fewer brand selection decisions per year, with higher stakes per decision; brands that are embedded in a designer’s workflow through advisory relationships, spec tools, or preferred supplier status carry disproportionate advantage over those competing on price at the transaction level.
• The “deepen existing clients” posture means designers are less actively shopping for new brand relationships. The window for new brand introductions is narrowing relative to periods when designers were growing client counts rapidly.

Sources: Business of Home, Home Accents Today