At some point, the dam will break, and all that pent-up housing market demand that has been bottled up will be unleashed in the manner of robust flooring sales. At least that is the hope among flooring distributors who are closing out a disappointing 2025 that was held back by rising home prices, inflation and high mortgage rates. After three years of downturns, wholesalers are confident the tide will turn soon, perhaps even in 2026.
FCNews’ Top 20 Distributors issue takes a closer look at the factors shaping the wholesale flooring market.
It’s the perfect storm of soaring home prices, high mortgage rates and homeowners locked into existing low rates and unwilling to sell.
It’s a stalemate—and it’s where flooring distribution finds itself with two months to go in what can only be described as a frustrating 2025 that began with so much promise.
Over the course of 10 months, the key economic indicators on which flooring relies—home prices, mortgage interest rates and consumer confidence—have failed to produce any meaningful lift for the industry. As such, the majority of this year’s top 20 distributors are forecasting 2025 numbers below 2024’s top-line sales.
“Interest rates, tariffs and general uncertainty about the economy is impacting consumer confidence,” said Brian Green, chief sales and marketing officer for Mansfield, Mass.-based UCX. “As a result, the residential remodel segment continues to be soft while the builder market vacillates between some positive months and some negative months.”
Green’s sentiments are shared by fellow executives. “We’re seeing more of the same flat-line activity we’ve experienced over the past 2+ years as the impetus to change simply isn’t happening and doesn’t appear to be close on the horizon,” said Jeff Striegel, president of Elias Wilf, Owings Mills, Md.
Striegel blamed what he called a “dual-issue situation” for today’s market constraints. “First, the strain on the consumer from sticky inflation across the board that has lingered and isn’t going down—especially with food, along with the rising cost of home ownership and virtually everything around living expenses from property taxes to insurance to energy—have frozen the consumer on larger ticket discretionary spending, like flooring. Second, the housing market, which is a huge driver for flooring, is also frozen. The cost of housing that has homes doubling in value in just five to seven short years, combined with interest rates that have doubled in the past three years, has created a real quagmire.”
In June, the median price for an existing home in the U.S. reached a record high of $435,300, according to the National Association of Realtors. That’s up 2% from a year ago and marked the 24th straight month of annual price growth. That pressure on affordability, coupled with persistently high interest rates and seller hesitation (over 60% of homeowners have sub-4% mortgages) have curtailed growth for many. “We have existing homeowners not willing to trade out of low mortgages, and first-time buyers who are shut out by absurdly low affordability—certainly not a winning combination,” Striegel said. “Even people who have money are sitting on the sidelines; this year has been a disappointment.”
What’s more, U.S. existing-home sales volumes have fallen to levels not seen since the aftermath of the Great Recession, with some observers noting the current gridlock is even more pronounced than that period.
When conditions ease is anyone’s guess. “There do not appear to be any indicators that the economy is going to be a help over the next few months,” said Aaron Rhoderick, vice president of sales, Tri-West Ltd., Santa Fe Springs, Calif. “With the construction industry now in a recession, we do not see that changing soon. The uncertainty around jobs and interest rates do not make us see any improvement ahead in the near term.”
Some blame the Fed’s reluctance to lower interest rates sooner as contributing to the slowdown. Others say lowering interest rates won’t have the
desired effect, at least not yet. “Many pundits are holding out hope for interest rate cuts, and while I believe we will see cuts in the coming quarters, I am not sure they’ll be the panacea for our industry that many expect,” said Scott Rozmus, president/CEO of FlorStar Sales, Romeoville, Ill. “Those cuts will impact more greatly short-term rates; until the rates on 10-year notes move significantly, we won’t necessarily see dramatic changes in mortgage rates, housing purchases and so on.”
The relatively slow economy has meant discretionary income is not being spent on flooring the way it historically has. “The commercial and new home construction business has yet to fully recover from the inflation generated by the previous administration, and the market is in desperate need of a 100-basis point reduction in interest rates,” said Dave White, president, Tri-West.
Outlook
It wasn’t long ago that mortgage rates averaged below 3%, but history suggests that was an anomaly. In fact, the average 30-year fixed mortgage rate over the past 50 years has been approximately 7.7%. In fact, Freddie Mac, which has tracked rates since 1971, reports an average of 7.71% for the period between April 1971 and September 2025.
This historical average helps provide perspective on current mortgage rates, which have varied significantly over time.
The question on many distributors’ minds: how long before consumers accept 6% (or slightly higher) as the new norm and stop sitting on the sidelines.
Some executives see that happening in 2026. “We’re confident in the long-term outlook driven by key factors such as an aging housing stock requiring renovation, growing demand for new home construction and ongoing opportunities in the commercial sector,” said Maureen McCann, senior marketing manager for NRF Distributors, Augusta, Maine. “Our success remains closely aligned with that of our retail partners, and we’re committed to working through today’s challenges together.”
Other distributors are counting on new lines or projects in the pipeline. “We have projects going on and have momentum on our side—I’m optimistic,” said John DeYoung, CEO, All Surfaces, Minneapolis. “If Q4 holds I think we will be flat for the year, and I’m counting that as a win.”
The good news for Apollo Distributing, Fairfield, N.J., is they have projects specified and confirmed now through part of 2026. “Flooring remains essential, and with our wide product mix we feel well positioned to service demand across commercial, multifamily and residential sectors,” said Harrison Slobodien, director of business development.
Elias Wilf’s Striegel points to the economics of the housing market as being ready to turn positive. “I’ve always said that the flooring industry isn’t like the restaurant industry where if they’re closed for a blizzard on Monday, you can’t serve Monday’s meal on Tuesday; it’s lost business. In the flooring industry, the business isn’t lost, it’s postponed. We have what is now close to three years of pent-up demand looming—and a ton of cash sitting on the sidelines from both an incredible rise in home value driving higher homeowner equity and the substantial gains in the stock market.”
According to the Federal Reserve, home equity is at record levels of roughly $34 trillion, with the average mortgage holder sitting on over $300,000 in equity (50% of it being accessible.)
“This combined with the looming interest rate cuts are setting the stage for what could be a terrific 2026,” Striegel said. “We’re actually very optimistic for what is setting the stage for a robust 2026. We haven’t seen downturns typically go past two to three years; this (2025) is in its third year.”
