Strategic Exchange: With some elements of the economy strong, will the housing market finally let loose? – Sept 2026

By Kemp Harr

Are you ready for the dog days of summer to be over? This one has been especially hot. Hopefully, cooler weather, the return of fall football and a change in consumer psychology will help trigger the next inflection point in the housing market. It is time for some optimism, right?

There are pockets of strength in the U.S. economy. Manufacturing is expanding, new orders and backlogs have improved, and corporate investment remains strong. Companies continue pouring money into artificial intelligence, data centers, electrical infrastructure and equipment. Productivity is rising, corporate profits remain healthy, and underlying private domestic demand has been considerably stronger than headline GDP suggests. In the second quarter, real final sales to private domestic purchasers grew at a 4.2% annualized rate, even though headline GDP grew just 1.5%.

But that strength has yet to reach the residential flooring business. If you listened to my late-August podcast with industry consultant Bruce Zwicker, you heard that he does not anticipate a meaningful uptick in residential demand for at least another year. Fed chairman Kevin Warsh also struck a cautious tone at the annual economic symposium in Jackson Hole, Wyoming. He emphasized that inflation remains too high and left the door open to further action. Meanwhile, consumer confidence is near a seven-month low, as elevated food and gasoline prices continue to squeeze household budgets.

For the residential flooring business, the most important driver is not housing starts—it is existing-home turnover. Existing-home sales are currently running at an annual rate of just 4.06 million. When that figure moves convincingly above 4.5 million and begins approaching 5 million, flooring retailers should start feeling the release of pent-up remodeling demand.

Wouldn’t it be great if Americans collectively flipped a switch and decided that today’s economic environment is the new normal—and that it is finally time to buy a different home? The good news is that years of rising home values have given many homeowners substantial equity. Eventually, that equity will be put to work. I’m hoping fall brings the change in psychology we have been waiting for. At some point, consumers will stop postponing the move and get on with their lives.

The commercial flooring market is already benefiting from the stronger side of the economy. Fuse Alliance’s Geoff Gordon told me in a recent interview that healthcare, education, multifamily and workplace renovation are currently driving the uptick in commercial activity.

A FOCUS ON INSTALLATION

This September issue of Floor Focus is a special edition designed to focus attention on a segment within our business that deserves some special consideration. We all know that flooring in a box or on a roll is not a floor until it’s installed. We also know that there’s no such thing as free installation. That concept in and of itself, promoted by the home centers in an effort to take marketshare, diminishes the reputation of the men and women who have chosen to focus their livelihood on making homes and commercial buildings sparkle with new floorcovering. 

We just mentioned that demand in the largest flooring segment—residential—is soft, so for today, we have enough installers. But when the market starts to recover, that equation changes, and the industry won’t be able to recover fast enough. Granted, much of what is installed today is modular, so there is less demand for stretching and nailing, but it’s also thinner and less forgiving, so site prep is much more important. 

25 YEARS SINCE 9/11 

It’s hard to believe that on the 11th of this month, we will be acknowledging the terror attack on our nation. Remember the signs that appeared following the attack: “Never forget!” 

In the 25 years since 9/11, the flooring industry has changed almost beyond recognition. Carpet has surrendered much of its market to hard surface. LVT has grown from a relatively small commercial category into the industry’s largest product segment. Digital printing allows vinyl, laminate and ceramic tile to replicate natural wood and stone with remarkable realism, while click systems have changed how many floors are installed. 

Manufacturing has become more global, the industry more consolidated and the consumer more informed. Yet amid all this innovation, one thing has not changed: every floor must still be installed by someone who understands the product, prepares the substrate and possesses the skill to complete the job properly. 

I’ll certainly never forget that day. I was head of marketing for the carpet backing company that co-developed SoftBac Platinum with Shaw Industries, and we were in Vermont filming an episode of Bob Vila’s “Home Again” show. With me were Kathy Ireland, Bob Vila, George Davies (retired from Shaw) and Jim Walker. Here is a link to the show. (Our segment is toward the end.)

For comments on this column, email kemp@floorfocus.com.