Annual Report: Last year, market conditions did not improve fast enough to turn around the flooring market – May 2026

Introduction by Darius Helm, Statistics by Market Insights LLC

In 2025, the U.S. flooring market fell by 3.2% in dollars to $23.072 billion, according to Market Insights. Low single-digit gains on the commercial side were not enough to counter mid-single-digit losses in the residential market, which represents roughly two thirds of the market.

Hopes were high going into 2025 that improving market conditions would unleash some pent-up demand and drive the residential segment into positive territory. Early on, though, economic indicators turned pessimistic again, as inflation stopped going down, “liberation day” tariffs started causing sourcing chaos and job creation stalled. The Fed eventually cut rates three times in the final months of 2025, and for a while, mortgage rates improved, briefly slipping under 6% in February of this year before rising again at the onset of the Iranian conflict. As of press time, 30-year fixed mortgage rates are about where they stood when the first quarter-point reduction was enacted last September.

While market conditions held back flooring gains in the low and middle part of the market, the higher end segment of the market—where gains in stock portfolios eclipsed interest rates, salaries are higher and houses are paid for—spent more freely. This dynamic meant unit growth was out of balance and, therefore, lower than revenue. Plus, there were tariff-driven price increases last year that further widened the delta between volume and revenue. By volume, the flooring industry was likely down by high single digits.

In terms of the numbers in this report, Market Insights’ Santo Torcivia has done his best to adjust the data, category by category, to null out buying ahead for anticipated prices and tariffs, but the impacts are still reflected in reduced domestic shipments.

OVERVIEW: FLOORING CATEGORIES

For the second year in a row, the resilient category ended up with the biggest piece of the pie, with $7.37 billion in revenues and a 31.9% share of the flooring market, edging out carpet. Domestic production, which accounts for 17% of U.S. consumption, fell by 5%, while imports, adjusted for tariff impacts, fell by 2.5%.

According to industry insiders, there was a wave of importing before the April 2 tariffs were implemented, and the buying continued, though at a more moderate rate, once tariffs were imposed and prices were on the climb. U.S. resilient flooring manufacturers—particularly rigid core producers—were not ideally positioned in terms of price points to take advantage of demand for inventory.

Most of the growth in resilient flooring over the last decade has been in the residential market with rigid core products, which have taken share from every hard surface category, as well as carpet. The bulk of what is sold into the market is SPC, the thinner, often cheaper, harder-underfoot of the rigid core constructions. WPC, which was the original rigid core that US Floors introduced in 2013, has a smaller share of the market, targeting the medium to higher price points, but it has been growing faster in the last couple of years, thanks to a range of SPC failures from low-end imports that gave SPC a black eye. It also saved the rigid-core category, at least for now, from the descent into commoditization the industry saw with laminates two decades ago.

The carpet category was down nearly 4% to an estimated $7.226 billion, just behind resilient flooring, losing a slight amount of flooring marketshare. At the low end, expectations that carpet would make some gains as the floorcovering with the lowest installed price did not come to pass. Most industry insiders contend that public perception is the biggest barrier to carpet’s growth, amplified by its negative portrayal on home improvement shows. Flooring producers don’t do much in the way of consumer advertising, so for many people, the most exposure they get is from home improvement shows, which are constantly ripping out old, ragged carpet and replacing it with hard surface flooring. 

Unfortunately, that’s the narrative that carpet producers need to face down.

The good news is that the higher end of the residential carpet market has been performing well, due in part to enhanced aesthetics from LCL tufting technology and to imported decorative styles made of wool and specialized synthetics. Like The Dixie Group did five years ago, big mills like Shaw and Mohawk are expanding their offerings beyond their in-house machine-made broadloom with imported goods that elevate their brands—in this case, Anderson Tuftex and Karastan, respectively. There are already some heavy hitters in the decorative carpet segment, including Stanton and Kaleen.

At the medium to higher end, demand for custom rugs fabricated from broadloom is growing at a healthy clip. If the trajectory holds, we may see traditional prefabricated area rugs ceding measurable share to carpet—especially in light of how e-commerce has decimated the profitability in that sector for traditional dealers.

The area rug category contracted about 8% last year. About 80% of area rugs sold into the U.S. market are imported, many from Asian countries that were hit hard with tariffs last year, likely weakening demand even more. As area rugs have lost its heirloom status and price points have fallen, the majority of flooring retailers don’t sell traditional area rugs anymore. Most of the volume today in the prefabricated area rug business has been shifting away from even the home centers and is now an online product. Fortunately for flooring retailers, custom rug fabrication from broadloom carpet is fulfilling the consumer’s need to add texture and softness to their décor. 

Ceramic tile was down less than 1% in 2025 to an estimated $3.715 billion and, in fact, took more share of the flooring market than any other category, including resilient. By volume, ceramic was down nearly 5%, so, average price points were up. Ceramic tile producers report that some of this reflects a movement toward higher-end ceramic tile purchases.

In dollars, about two thirds of U.S. tile consumption is imported, and more than 70% by volume, which means that what’s imported on average is less expensive than what’s produced domestically. Last year, imports were up while U.S. mill shipments were down. And import volumes skewed toward the European producers and away from some of the large volume producers, including India and Mexico, and this likely also contributed to higher prices. 

Like ceramic, imports were up, and domestic shipments were down in the hardwood category, with imports accounting for 55% of U.S. consumption, up from 51% in 2024. Though it ended up slightly ahead of the overall market, hardwood flooring fell about 3% last year to $2.065 billion. 

Higher-end products drove hardwood revenues last year and so, too, did price increases from hardwood producers and importers of tariffed products. The 10% drop in U.S. mill shipments suggests that imports benefited from a surge in demand ahead of the tariffs.

The laminate category lost a little ground last year, down 5.4% to an estimated $984 million, led by a 10.4% drop in domestic shipments. Imports were up 2.4%. Increasingly, all sorts of flooring producers and distributors have been adding laminates to their portfolios, and industry experts suggest that this new volume has helped drive imports. 

HOUSING MARKET UPDATE

While most industry experts seem to agree that residential remodel was the toughest market last year, down around 4%, with builder and multifamily both down a little less, the different manufacturers we spoke with had surprisingly different takes on the market. For one industry leader, multifamily was the hardest hit, while another saw growth in that market. One of the giants reported that specialty retail was most improved last year. The truth is that it was a chaotic year, and where the market was vulnerable, be it in terms of regions of the country, channels to market or price points, the impacts were amplified, while other parts of the market fared better and even made gains. Migration patterns, regulations and local zoning laws, and regional incentives influenced spending on flooring. 

In terms of multifamily, across the country the pendulum has swung back to an undersupply of units, but in many markets, including metro markets in growth mode, there is currently an oversupply. In terms of flooring, there is a lot of pricing pressure, with one manufacturer even noting multifamily gains in 2mm felt-backed sheet goods—fortunately, some manufacturers still produce those floorcoverings. Renters stayed put last year, and many were incentivized to stay in their units so that property managers could keep operating costs down. Multifamily specialists report doing fewer full units and instead doing the even lower margin work of patch and repair.

Another big challenge facing the multifamily market going forward is the shift from carpet to LVT, which has lengthened the replacement cycle, slowing down the revenue rate in this high-volume, low-margin business.

High interest rates and rising home values have held back home buying in the U.S. market. Existing-home sales ended 2025 flat with 2024 at 4.06 million home sales. The median home price ticked up 0.4% to $405,400. At year-end, there were 1.18 million units available on the market. “2025 was another tough year for homebuyers, marked by record-high home price and historically low home sales,” said Lawrence Yun, chief economist for the National Association of Realtors.

New home sales were down 1.1% in 2025 to about 679,000 single-family homes, according to the U.S. Department of Housing and Urban Development. Builder business has been sluggish, with the market held back by high mortgage rates, and some builders have been buying down interest rates to encourage buyers.

2026 AND BEYOND

Some manufacturers reported that 2026 started on a positive note, with good activity through February. Then came the conflict with Iran, gas prices quickly rose, and the market drew back.

For the flooring industry, the closure of the Strait of Hormuz isn’t just about fuel prices; it’s also about raw materials. Over 60% of the industry is synthetic polymer-based—resilient flooring and most of the carpet and rugs are made out of just four or five polymers that are either entirely or largely fossil-fuel based. And every other category to some degree relies on products refined from petroleum and natural gas. Already, flooring manufacturers are raising prices. 

At the same time, inflation is on the rise again and interest rates have stalled, so hopes are largely dashed for a strong summer season. 

Nevertheless, flooring insiders are hopeful that a speedy resolution with Iran will enable the market to regain its footing this fall, with pent-up demand continuing to build. As of press time, no end is in sight. But that could change tomorrow.

You can read the individual reports below:

• Resilient
• Carpet
• Rugs
• Ceramic
• Hardwood
• Laminate