Consumers pulled back on big-ticket home purchases in 2025, redirecting more of their budgets toward smaller items and essential repairs, a shift that is expected to continue into 2026, according to a new report from data and insights firm Consumer Edge.
Higher interest rates, limited housing turnover and ongoing affordability pressures dampened overall home and garden spending last year, the firm said in its “Home and Garden Outlook 2026.” While shoppers delayed large discretionary purchases such as furniture and mattresses, spending proved more resilient in categories including décor, kitchen products and basic home maintenance. According to Chain Store Age, the report found the divide between discretionary and essential spending continues to shape the market this year.
Pricing pressure persisted across the home furnishings category throughout 2025, even as demand softened. Inflation remained a factor, with average transaction sizes increasing across a majority of leading brands. Retailers including Pottery Barn, West Elm, Crate & Barrel and Ashley Furniture saw higher average ticket sizes despite slowing demand.
Spending slowed across income groups late in 2025, with the sharpest declines among households earning less than $40,000 and those earning more than $150,000. The trend signals a broader reallocation of discretionary dollars away from home-related categories, according to the report.
Home improvement spending softened for a third consecutive year but stabilized around repairs and maintenance. Even so, demand remained above pre-pandemic levels. Retailers tied to everyday repairs and upkeep outperformed the broader category, including Ace Hardware, Sherwin-Williams, Menards and Rural King.
Millennial homeowners emerged as a key source of future growth. Consumers 25 to 44 increased their share of home improvement spending in 2025, with brands such as Lowe’s, The Home Depot, Ace Hardware and Sherwin-Williams gaining traction through loyalty programs, digital tools and project support resources.
“What we’re seeing isn’t a collapse in home spending, but a reset of priorities,” says Michael Gunther, VP of Research and Market Intelligence at Consumer Edge. “Consumers are pushing pause on large, discretionary purchases while continuing to invest in repairs and upkeep. That dynamic is also evident in home furnishings, with consumers delaying big-ticket purchases like furniture and mattresses while continuing to spend on lower-commitment upgrades, such as small décor and kitchen product purchases.”
“In 2026, retailers that focus on everyday needs, durability and real value are more likely to benefit from customer demand, while big-ticket home purchases are likely to remain under pressure until housing and financing conditions improve,” Gunther said.
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