December 2025 Furniture Insights Report From Smith Leonard

The Conference Board Consumer Confidence Index® declined by 3.8 points in December to 89.1
(1985=100), from 92.9 in November. This includes an upward revision to November’s reading, as responses collected
after the end of the federal government shutdown (which spanned October 1 to November 12) were more positive than
those collected during the impasse.

The Present Situation Index—based on consumers’ assessment of current business and labor
market conditions—plummeted by 9.5 points to 116.8 in December.

The Expectations Index—based on consumers’ short-term outlook for income, business, and
labor market conditions—held steady at 70.7. The Expectations Index has now tracked under 80 for 11 consecutive
months, the threshold below which the gauge signals recession ahead.

“Despite an upward revision in November related to the end of the shutdown, consumer confidence fell again in
December and remained well below this year’s January peak. Four of five components of the overall index fell, while
one was at a level signaling notable weakness,” said Dana M Peterson, Chief Economist, The Conference Board.

Peterson added: “Consumers’ write-in responses on factors affecting the economy continued to be led by references to
prices and inflation, tariffs and trade, and politics. However, December saw increases in mentions of immigration,
war, and topics related to personal finances—including interest rates, taxes and income, banks, and insurance. The
responses continued to skew pessimistic but less so than November, potentially due to fewer negative comments about
prices and inflation, politics, as well as a rebound in positive responses about interest rates. Notably, the Federal
Reserve Board cut monetary policy rates on December 10 for a third time in 2025, which landed in the second half of
the survey sample interval.”

Consumers appeared more cautious about plans for buying big-ticket items over the next six months.
Homebuying expectations also ticked downward. Plans to buy household appliances all dipped, as did purchasing plans
for PCs and laptops, as well as video game consoles. By contrast, future spending plans for smartphones, tablets, and
digital cameras continued to trend upward on a six-month moving average basis. Used cars, TVs, and smartphones
remained the most popular within their categories for future purchases.

Housing

Existing-home sales increased by 0.5% in November, according to the National Association of REALTORS® Existing-Home Sales
Report. The Report provides the real estate ecosystem, including agents and homebuyers and sellers, with data on
the level of home sales, price, and inventory.

Month-over-month sales increased in the Northeast and South, showed no change in the West, and fell in the Midwest.
Year-over-year sales showed no change in the Northeast and South, and decreased in the Midwest and West.

“Existing-home sales increased for the third straight month due to lower mortgage rates this autumn,”
said NAR Chief Economist Lawrence Yun. “However, inventory growth is beginning to stall. With distressed
property sales at historic lows and housing wealth at an all-time high, homeowners are in no rush to list their
properties during the winter months.”

“Wage growth is outpacing home price gains, which improves housing affordability. Still, future affordability
could be hampered if housing supply fails to keep pace with demand,” Yun added. As has been the case throughout
the year, single-family home sales outperformed condominium sales in November.

Total Existing-Home Sales for November

• 5% increase in existing-home
  sales month-over-month to a seasonally adjusted annual rate of 4.13 million.
• 0% decrease in sales year over year.

Single-Family-Homes Sales in November

• 8% increase in sales month over month to a seasonally adjusted annual rate of 3.75 million, down 0.8% from
  November 2024.
• $414,300: Median home price in November, up 1.2% from last year.

Condominiums and Co-ops Sales in November

• 6% decrease in sales month over month and year over year to a seasonally adjusted annual rate of 380,000.
• $358,600: Median price, up 0.1% from November 2024.

Mortgage Rates

• 6.24%: The average 30-year fixed-rate mortgage in November,
  according to Freddie Mac, down from 6.25% in October and 6.81% one year ago.

Sales of new single-family houses in August 2025 were at a seasonally-adjusted annual
rate of 800,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and
Urban Development. This is 20.5% above the July 2025 rate of 664,000, and is 15.4% above the August 2024 rate of
693,000.

Compared to August 2024 on a seasonally-adjusted basis, sales were up 15.4% overall
with sales also up 21.0% in the South, up 40.9% in the Northeast, up 20.3% in the Midwest, but down 5.7% in the
West.

Other

Real gross domestic product (GDP) increased at an annual rate of 4.3% in the third quarter of 2025 (July, August, and
September), according to the initial estimate released by the U.S. Bureau of Economic Analysis. In the second quarter,
real GDP increased 3.8%.

The increase in real GDP in the third quarter reflected increases in consumer spending, exports, and government
spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of
GDP, decreased.

Compared to the second quarter, the acceleration in real GDP in the third quarter reflected a smaller
decrease in investment, an acceleration in consumer spending, and upturns in exports and government spending. Imports
decreased less in the third quarter.

Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment,
increased 3.0% in the third quarter, compared with an increase of 2.9% in the second quarter.

THOUGHTS

First of all, I would like to recognize and thank Sherry White for her many years of dedication and service to our
Furniture Insights program and congratulate her on her upcoming retirement. We will miss you, Sherry!

Monthly new orders for participants in our survey continued to alternate back and forth between increases and
decreases compared to the prior year (-1%, +7%, -3%, +13%, +3%, -1%, -9%, +1%, -5%, -3%). 

However, year-to-date new orders and shipments through October 2025 are now even with 2024, which while nothing to
write home about given calendar 2024 ended up 1% down from 2023 (which was up 5% over 2022), it is at least a positive
sign given the many challenges from the first half of the year.

And while retail has been slow, recent industry reporting of certain key retailers shows improvement in recent months
and optimism for 2026 based upon these trends and expectations of interest rates and housing for next year.

Here’s wishing everyone a happy and prosperous new year. 

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