U.S. floor coverings sales declined in 2023 after two years of relatively strong growth, according to Catalina Research. Rising interest rates resulted in a declining housing market which caused flooring purchases to drop. Total U.S. housing demand (resales, new starts and manufactured home shipments) decreased 28.6 percent between 2021 and 2023 as mortgage interest rates surged by 129.4 percent. Housing demand drives floor covering spending since some 60 percent of the total market comes from homeowner and builder purchases. Meanwhile, commercial market sales opportunities remained on an upward trend since nonresidential building construction spending continued to increase at double-digit rates. Commercial market growth, however, could not offset the decline in residential markets.

Category sees a decline after two-year uptick

While hardwood remains a sought-after floor, macroeconomic changes along with competitive products in other categories led to decline in sales for 2023.

According to Catalina Research, “After two years of relatively strong growth, rising interest rates resulted in a declining housing market which caused flooring purchases to drop. The wood flooring sector experienced some of the sharpest sales decline in the industry in 2023.”

2021 and 2022 sales were propelled by post-pandemic activity. Explained Mannington’s John Hammel, senior director of hardwood and laminate, “An increase in consumer demand associated with being at home during the pandemic.”

Mohawk’s David Moore, senior product director of wood and laminate, noted, “2021 and 2022, from an uptake perspective, was driven by that COVID, post-COVID, remodel activity.

Consumers weren’t traveling, they weren’t eating out, they weren’t doing many things they would typically spend their discretionary money on. They were also spending a proportionally higher amount of time inside of their homes. So, there was a high interest in remodeling.”

Behind the Numbers

According to Catalina Research, wood flooring dollar sales may have dropped by 10.6 percent to $4.1 billion. The report also stated that “square foot sales could have dropped by 12.7 percent to 1.4 billion. In 2023, wood flooring’s share of total floor covering dollar sales could have been 11.9 percent and 5 percent of total square foot sales. This is down from 12.4 percent and 5.4 percent, respectively, in 2022.”

Much blame can be assigned to overall economics. Noted Hammel, “Inflation and high interest rates have dampened consumer demand over the last couple years. This can be said for all flooring categories. For wood specifically, the lower price-point products have seen the greatest decline. The higher you go up the price curve, the less impact these macroeconomics have on the consumer.”

Brian Parker, vice president, product management, solid hardwood, AHF Products, explained further, “With inflation and Americans having to spend more on the necessities — food, gas, etc. — that has limited their discretionary funds.”

Another factor is competition from other flooring categories. CALI’s Doug Jackson, president, offered, “The growing popularity of alternative flooring materials like luxury vinyl and laminate has diverted consumer interest.”

As well, Catalina reported, “Manufacturers and marketers also continue to see increased competition from rigid core LVT, which is a direct competitor to engineered wood flooring. Wood flooring also has above average dependence on the builder and residential replacement markets. Wood flooring sales were especially hurt by the nearly 19 percent drop in existing home sales, which is the major driver of homeowner flooring replacement projects.”


Finding Opportunity

Hardwood sales remained highest with residential builders, residential replacement and commercial new construction in 2023 presenting opportunity.

“The hardwood industry should focus on innovation with the goal of developing more durable and cost-effective products. Enhancing supply chain efficiencies can help reduce costs and improve availability,” suggested Jackson.

Shaw Floors’ Kyle McAllister, director of hardwood, added, “The hope for hardwood lies in its enduring appeal and sustainability. People seeking natural, authentic materials will continue to prefer hardwood, which has been trusted for centuries.”

AHF Product’s Parker pointed to hardwood’s beneficial features. “It does some things other categories can’t do. [For example, hardwood] can be sanded, refinished and made to look new again. It’s about marketing the unique attributes — the features, benefits, performance and value.”

Looking Ahead

With the highest average value per square foot of hardwood in the past six years, there is still hope for the category.

Mannington’s Hammel voiced, “The hardwood category will always be around. There will always be a demand for the real thing. As interest rates decline, demand will start to improve.”

While the average price per square foot increased to $2.96 for 2023 compared to $2.17 in 2019, it also increases the value of the home.

“Engineered hardwood floors are one of the only floor covering choices that consumers can view as an investment. They’re not having to replace their floors and figuring out how much that’s going to cost them. They’re making an active investment in their home by putting in wood flooring, which is going to drive home price appreciation up to — what our research suggests — 10 percent,” explained Moore.

Agreeing, Milton Goodwin, vice president of product management on engineered hardwood at AHF Products added, “We are seeing a comeback to the tried and true — whether it’s solid or engineered [hardwood]. Wood, along with porcelain, are considered the forever floors. Meaning that when people come in wanting to purchase a wood floor, they are not going to buy another floor. They are going to put a wood floor in, and it’s there forever. The structure will certainly last as long as they live in the home, adding value to it — as perceived by the National Realtor Association.”

As well, hardwood suppliers continue to bring innovation and new technologies to the category to better meet consumer’s needs.

For instance, Hallmark’s Mark Casper, vice president of sales and marketing, explained, “Our Spotlight Dealer loyalty dealer program has been a hot spot for our specialized retailers across the nation, and by working together, it has created a seamless transition for those looking for hardwood and, more specifically, Hallmark Floors.”

Additionally, McAllister noted, “By innovating aesthetically to offer unique options, we filled gaps in the market and attracted consumers seeking authentic designs. Our company stayed strong through maintaining robust customer relationships, providing unwavering support, and receiving loyal support in return. This mutual trust and commitment have been key to our resilience in the market.”

Source: floorcoveringweekly