Stats 2026: Housing market sub-segments showing signs of life

The primary challenges impacting U.S. housing market activity in 2024—persistent inflation, high mortgage rates, increased costs for builders and general economic uncertainty—spilled over into 2025, putting a slight drag on overall starts for the year.

U.S. Census Bureau construction data put total 2025 U.S. housing starts (including single-family and multifamily construction) at 1.36 million units, down 0.6% compared to 2024. But within that number, single-family starts fell by roughly 6.9%.

That’s the bad news.

Here’s the silver lining: While the overall number was down, the falloff wasn’t as pronounced as it was in 2024. That year, housing starts fell nearly 4% from 2023, meaning the industry is slowly heading in the right direction. More good news: multifamily starts—which plummeted by 25% in 2024—reversed course and actually increased by 17.4% in 2025. Historically, speaking, single-family construction has been the primary driver of U.S. housing growth, while multifamily activity tends to fluctuate more dramatically with capital markets and rental demand.

Buddy Hughes, immediate-past chairman of the National Association of Home Builders (NAHB), attributed the decline in single-family construction to affordability pressures in the ownership market amid sustained demand for rental housing.

“Market conditions remain challenging with two-thirds of builders reporting they are offering incentives to move buyers off the fence,” Hughes, a Lexington, N.C.-based home builder, stated at the close of 2025. “Meanwhile, builders are contending with rising material and labor prices as tariffs are having serious repercussions on construction costs.”

While single-family builders continued to face affordability pressures for the bulk of 2025, multifamily developers managed to prosper courtesy of a large pipeline of projects initiated during the post-pandemic housing boom. At the same time, new-home builders aimed to capture market share by offering incentives, mortgage-rate buydowns and product redesigns aimed at affordability.

Looking past new home construction activity and into the existing home sales market, research showed activity remained below long-term historical averages. Anecdotal data showed many homeowners remained reluctant to relinquish mortgages obtained during the low-rate environment of 2020-2022. Regional performance varied significantly, with the Northeast and Midwest posting increases while the South and West experienced declines.

On the whole, housing demand remained fundamentally supported by demographics, household formation, employment growth and a persistent nationwide housing shortage. While inflation eased compared with the peaks experienced earlier in the decade, mortgage rates remained elevated enough to keep monthly housing payments near record levels in many markets around the country.

Following is a deeper dive into some of the key factors that impacted the U.S. housing market in 2025:

Mortgage movement

The housing industry entered 2025 with expectations that lower interest rates would stimulate demand. “Just wait—demand will pick up in the second half,” they said. However, mortgage rates remained higher than many economists anticipated, limiting affordability for first-time buyers and move-up purchasers alike. Rates fluctuated in the mid-to-upper 6% range before settling slightly lower late in the year, heavily influenced by persistent inflation and cautious Federal Reserve policy.

“The rising federal budget deficit continues to put pressure on long-term interest rates, including mortgage rates,” Lawrence Yun, chief economist at the National Association of Realtors (NAR), wrote in a 2025 report.

Builders and real estate professionals spent much of the year adapting to these realities. Rather than relying solely on price appreciation, many builders responded to market conditions by introducing a variety of affordability-focused strategies, including:

• Mortgage-rate buydowns
• Closing-cost assistance
• Smaller floor plans
• Reduced lot sizes
• Expanded townhouse offerings
• Simplified product packages

These approaches enabled many builders to continue generating sales despite affordability constraints.

Builders also reported the inventory picture improved modestly compared with 2024. Realtor.com reported growing levels of housing inventory in many markets, helping ease some of the supply shortages that had characterized the post-pandemic era. However, inventory levels remained below long-term norms in several key metropolitan areas.

Realtor.com economists noted that the market was gradually moving toward a better balance between buyers and sellers as inventory expanded and price growth moderated. The result was a housing market that remained active but subdued. While sales occurred and construction continued, prices generally remained stable.

Danielle Hale, chief economist for Realtor.com, described the housing market in mid-2025 as a study in contrasts. “Buyers are seeing more choices than they’ve had in years, but many sellers—anchored by peak price expectations and upheld by strong equity positions—are deciding to step back if they don’t get their number,” she explained.

Hale noted that rising inventory was one of the defining housing trends of 2025. Active listings exceeded 1 million homes nationally for several months during the year, providing buyers with substantially more choices than were available during the inventory-starved years immediately following the pandemic.

The increase in available inventory helped shift negotiating leverage away from sellers and toward a more balanced market environment, even as affordability challenges continued to constrain overall sales activity, Hale noted. Inventory levels rose nearly 29% year-over-year by mid-2025, reaching the highest post-pandemic levels on record.

“After years of constrained conditions, the housing market is giving buyers something they haven’t had in a long time: options,” she stated in a mid-2025 report.

Housing start swings

New residential construction remained one of the most closely watched indicators of housing market health throughout 2025. Data collected through the Cen

sus Bureau’s New Residential Construction program tracked permits, starts, completions and units under construction across the nation. (Note: The Census Bureau defines a housing start as the beginning of construction on a privately owned residential structure.)

Single-family housing—while down less than 1% last year—remained the largest segment of new residential construction in terms of total physical units. NAHB reported that single-family housing starts totaled approximately 943,000 units in 2025 compared to approximately 417,000 multifamily starts. While single-family construction struggled, multifamily housing demonstrated greater resilience. Apartment developers entered 2025 with a large pipeline of projects already underway. Many of these developments were initiated during the surge in apartment demand that followed the pandemic.

It was that pipeline activity, observers note, that contributed to the high-double digit growth seen in the multifamily segment last year. Although some high-density urban markets experienced slower activity, “low-rise” multifamily projects in particular remained active in many regions. According to Jing Fu, senior director of forecasting and analysis, NAHB, multifamily construction performance varied significantly by market type. High-density urban markets generally cooled, while lower-density apartment development remained comparatively healthy.

According to Fu, the multifamily sector benefited from several factors:

• Ongoing affordability challenges for prospective homebuyers
•  Strong rental demand
• Population growth in Sun Belt markets
• Continued household formation among younger adults

At the same time, developers faced challenges from higher financing costs and rising insurance expenses. These pressures led many developers to delay new projects, even as existing projects continued toward completion.

While national housing statistics provide an important benchmark, regional performance often reveals the underlying dynamics driving the U.S. housing market. In 2025, significant differences emerged among the Northeast, Midwest, South and West as local economic conditions, affordability levels, migration patterns and land availability influenced construction and sales activity.

Throughout much of 2025, the South remained the nation’s largest single-family construction market, although activity slowed compared with prior years. Builders in Texas, Florida, Georgia, North Carolina and Tennessee continued to account for a substantial share of national production. However, population growth alone was insufficient to offset affordability pressures in some of these markets.

Here’s how things shook out by region:

Northeast

NAHB’s analysis of Census Bureau construction data showed the Northeast was one of the stronger-performing housing regions during 2025 despite continuing affordability challenges and limited land availability. In fact, the Northeast recorded one of the largest increases in total housing starts among the nation’s four major regions. NAHB research showed housing starts in the Northeast increased 8.7% to 178,000 units.

It should come as no surprise that development in the multifamily segment played a significant role in the region’s gains, particularly in metropolitan areas surrounding Boston, New York City, Philadelphia and Washington, D.C. Developers continued to pursue higher-density projects to address chronic housing shortages and rising rental demand.

Overall, builders throughout the Northeast increasingly focused on townhomes, smaller-lot developments and mixed-use communities designed to improve affordability while maximizing land utilization.

Existing-home sales also strengthened. According to NAR, sales activity in the Northeast improved during portions of 2025 while home prices continued to post some of the strongest gains in the nation. Median home prices in the region exceeded $500,000 during several months of the year, reflecting the ongoing imbalance between supply and demand.

“The Northeast—previously held back by limited inventory—is now seeing increased buyer activity,” NAR’s Yun stated in a third-quarter 2025 report. The data, he noted, suggests that improving supply conditions were helping unlock pent-up demand among prospective buyers.

Midwest

The Midwest region emerged as one of the most stable housing locales in 2025. Compared with coastal markets, Midwestern housing remained relatively affordable, allowing the region to avoid some of the severe affordability pressures experienced elsewhere. States such as Ohio, Indiana, Michigan, Wisconsin and Minnesota benefited from lower median home prices and a comparatively balanced supply-and-demand environment.

Housing starts in the Midwest increased modestly during 2025, with both single-family and multifamily development contributing to growth. NAHB research showed housing starts in the Midwest increased 7.2% to 210,600 units. Builders reported that affordability advantages continued to attract first-time buyers who were increasingly priced out of coastal markets. Among the region’s strongest markets were Indianapolis, Columbus, Cincinnati, Minneapolis and portions of suburban Chicago, where population growth and employment expansion supported residential development.

The Midwest also recorded year-over-year gains in existing-home sales during several periods of 2025. NAR data showed sales activity generally outperforming the national average, supported by healthy labor markets and relatively stable mortgage qualification conditions.

Although construction costs remained elevated, Midwestern builders faced fewer land constraints than their counterparts in the Northeast and West, anecdotal research showed. This enabled many markets to continue adding inventory and helped moderate home price appreciation.

South

The South, historically a hotbed (pardon the pun) for new home construction activity, actually slid in 2025. NAHB statistics show new home construction was down 4% last year, culminating in 722,000 units.

Many southern cities continued to attract population growth from other regions. Migration trends established during the pandemic remained influential, although they moderated compared with previous years. Single-family construction remained concentrated in major Sun Belt markets, including Dallas-Fort Worth, Houston, Austin, Atlanta, Charlotte, Nashville, Tampa and Orlando. Builders continued to introduce smaller floor plans and more affordable product offerings to maintain sales momentum.

Meanwhile, multifamily construction remained especially active throughout the South. Large apartment projects continued to be delivered in many metropolitan markets, helping increase rental inventory and moderate rent growth.

NAR data indicated that existing-home sales in the South remained the largest of any region, representing nearly half of all U.S. transactions. However, year-over-year sales growth lagged behind some other regions as affordability challenges intensified.

West

The West region—typically associated with a high cost of living and restrictive regulations—continued to face some of the nation’s most significant housing affordability challenges in 2025. Several states, including California, Washington, Oregon, Colorado, Nevada and Utah, experienced elevated housing costs, limited inventory and ongoing land-use constraints. These factors contributed to weaker housing activity compared with other regions. NAHB data showed housing starts fell 0.8% to just under 300,000 units.

Looking more closely, single-family housing starts declined in many Western markets as builders grappled with high land prices, labor shortages and regulatory requirements. High mortgage interest rates approaching 7% further reduced affordability for prospective buyers.

construction remained relatively active in several large metropolitan areas. Developers sought to address housing shortages through apartment projects and mixed-use developments located near employment centers and public transportation corridors.

Existing-home sales in the West generally underperformed other regions during 2025. NAR reported that sales declined on both a monthly and annual basis in several reporting periods, reflecting continued affordability concerns. Nevertheless, home prices remained among the highest in the country, with median prices frequently exceeding $600,000.

New home sales—a bright spot

Amid the challenges facing the broader U.S. housing market, the new-home sales market served as one of the brighter spots in 2025. According to data released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development, new-home sales reached an annualized pace of 743,000 units by the start of the first quarter in 2025 and climbed as high as 800,000 units in August before moderating later in the year. By December 2025, new-home sales were running at a seasonally adjusted annual rate of 745,000 units, approximately 4% above December 2024 levels.

Sales of newly constructed single-family homes generally outperformed expectations during much of the year despite elevated mortgage rates, as builders successfully attracted buyers through mortgage-rate buydowns, price incentives and closing-cost assistance. Texas, Florida, Georgia and North Carolina remained among the nation’s leading new-home sales markets. Overall inventory increased, with Census Bureau data showing approximately 472,000 new homes available for sale at the end of 2025, representing a 7.6-month supply. This level of inventory was substantially higher than that typically found in the existing-home market and provided buyers with more options.

Existing home sales activity

While existing home sales trended upward in select markets in 2025, they remained the weakest segment of the aggregate housing market last year. The Northeast recorded year-over-year sales gains and some of the strongest price appreciation, and the Midwest posted relatively stable sales activity and continued affordability advantages. However, the South remained the largest existing-home market but experienced softer growth. Meanwhile, the West continued to struggle with affordability challenges and weaker sales activity.

When all was said and done, existing-home sales totaled approximately 4.06 million units during 2025, matching the lowest annual sales pace in roughly three decades, NAR research showed. So, what gives? Observers said high mortgage rates and limited inventory continued to suppress activity throughout much of the year.

A key challenge remained the so-called “lock-in effect.” Millions of homeowners continued to hold mortgages with rates below 4%, making them reluctant to sell and purchase another home carrying a significantly higher interest rate.

NAR’s Yun repeatedly noted throughout the year that inventory levels were gradually improving and that additional supply would be necessary to support stronger transaction volumes. By year-end, approximately 1.18 million existing homes were available for sale nationwide.

Although sales remained subdued, home prices proved remarkably resilient. The national median existing-home price reached approximately $414,400 during 2025, reflecting continued supply constraints and steady buyer demand.

Mitigating factors

Although housing activity stabilized in several areas during 2025, affordability remained the single most important issue confronting homebuyers, builders and policymakers throughout the year. Even though inflation moderated compared with the peaks experienced earlier in the decade, home prices remained historically elevated in many markets. Combined with mortgage rates that generally hovered between 6% and 7% during much of the year, monthly housing payments remained beyond the reach of many first-time home buyers.

Robert Dietz, NAHB chief economist, frequently emphasized that affordability challenges were constraining housing demand while simultaneously limiting builders’ ability to increase production. “Elevated financing costs reduced purchasing power and contributed to slower single-family construction activity during much of the year,” he stated.

The affordability problem was particularly acute for younger households, NAHB research shows. Many prospective first-time buyers remained renters longer than previous generations, delaying homeownership and contributing to continued strength in the apartment sector.

Throughout 2025, uncertainty regarding interest rates continued to influence housing decisions. Although many economists entered the year expecting significant rate reductions, mortgage rates remained higher than anticipated. This created challenges for both buyers and sellers. For buyers, higher rates reduced affordability. For sellers, elevated rates reinforced the lock-in effect, discouraging homeowners from listing properties financed during the ultra-low-rate period of 2020 through 2022. As a result, both new-home and existing-home markets operated below their long-term potential despite strong underlying demographic demand.

Affordability wasn’t the only issue impacting housing construction activity in 2025. NAHB surveys throughout the year consistently identified labor availability as one of the industry’s most persistent concerns, with builders across the country reporting difficulties finding tradesmen—particularly framers, electricians, plumbers, HVAC technicians and other skilled tradespeople like flooring installers. NAHB estimates that a persistent shortage of approximately 250,000 skilled workers is causing extended project timelines negatively impacting project completions.

The labor shortage, according to the association, is particularly prevalent in high-growth markets throughout the South and West. The shortage also affected multifamily construction, where larger and more complex projects often require specialized trades and extended construction schedules. While wage growth helped attract new workers to the construction industry, labor demand continued to outpace supply.

Land availability remained another significant challenge for builders in 2025. In many metropolitan areas, builders faced rising land prices, restrictive zoning regulations and lengthy permitting processes. These issues were particularly pronounced in the Northeast and West, where geographic constraints and regulatory requirements often limited development opportunities.

Builders and housing advocates increasingly called for local governments to streamline regulations and encourage higher-density development where appropriate.

Constraints on inventory also factored heavily into the housing equation for 2025. While housing inventory generally improved, it remained below historical averages. Realtor.com’s Hale said increasing inventory levels were helping restore balance to the market after several years of extreme shortages, although inventory growth varied significantly by region. Many Sun Belt market experienced meaningful increases in available homes, while inventory remained constrained in portions of the Northeast and Midwest.

On the whole, Realtor.com economists generally characterized 2025 as a year of gradual normalization. Hale observed that inventory conditions improved substantially compared with the severe shortages that characterized the pandemic housing boom. Moreover, increased supply gave buyers more choices and reduced some of the competitive pressures seen in recent years.

Outlook for remainder of 2026

Entering 2026, most housing economists expected the market to improve modestly, though not dramatically. The outlook among many industry analysts, economists and heads of housing associations suggested that lower interest rates, gradually improving affordability and expanding inventory would support increased activity across much of the housing sector.

NAHB, for its part, expects the single-family construction portion of the market to rebound modestly during 2026. Housing starts, NAHB analysts said, should benefit from easing mortgage rates and continued demographic demand from millennials entering prime homebuying years.

“The housing outlook in 2026 is one of cautious optimism as builders contend with rising material and labor prices and policy uncertainty, while builders and buyers alike should benefit from anticipated fiscal and monetary easing that will moderate housing finance costs and mortgage rates,” NAHB’s Dietz said.

To that end, NAHB is anticipating slim single-family construction growth for the remainder of the year. Single-family starts are expected to increase 1% to 940,000 units and move 5% higher in 2027 to 984,000. Meanwhile, townhouse construction gains continue, with market share at a multi-decade high of more than 18%.

Multifamily starts, meanwhile, are anticipated to fall 5% by year end to an annual pace of 392,000 units, and decline an additional 6% in 2027 to 367,000 units. These figures follow a pandemic-era boom, when multifamily production hit 547,000 in 2022 with record-high completions. The market has slowed due to tighter financing and rising construction costs and is moving towards a more constrained development environment.

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R.A. Siegel abruptly shuts down operations

FCNews has learned that The R.A. Siegel Company, a major wholesale distributor of flooring products in the Southeast for more than 65 years, is ceasing operations. This was confirmed by several of its vendor partners and employees.

The company began notifying employees roughly two weeks ago that it was closing its doors. An employee who worked in credit and collections for many years told FCNews by phone from company offices in Austell, Ga., that news of the impending closing came as a “shock” to her. She said the company still had inventory in its warehouse that it was looking to liquidate while the business was winding down, and that it was not taking any new orders.

The sudden closure impacted several of the company’s regional locations, including facilities in Austell and Mableton, Ga., and Groveland, Fla. Flooring retailers and commercial buyers affected by the shutdown are now rerouting their logistics directly through the manufacturers.

Johnson Hardwood, which provides a complete range of SPC/rigid core flooring, high-performance laminate and premium hardwood flooring, announced it has begun servicing its Southeast customers direct in the wake of the closure of R.A. Siegel’s operations. Effective immediately, the company will supply customers in Alabama, Georgia, Florida, North Carolina, South Carolina and Tennessee on a direct basis.

“We’re doing everything we can to provide a seamless transition,” Billy Ko, Johnson Hardwood CEO, told FCNews. “We will fully support the region via our network of warehouse locations to ensure reliable service and consistent supply. Customers will see improved communication, streamlined ordering processes, better inventory access and faster response times. Plans are also in the works to open an additional warehouse.”

For the full story, see the July 13 print edition of FCNews.

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Mannington Mills awards four community service scholarships

Salem, N.J.—Mannington Mills has awarded “Stand on a Better World” scholarships to four students in recognition of their dedication to local community service.

The company awarded two scholarships in New Jersey and two in Georgia. The scholarship program is now in its 20th year in Salem and third year in Calhoun, Ga. Donations from Mannington Mills associates at those two facilities fully fund the program.

“These scholarships embody our company’s ‘Care’ and ‘Do the Right Thing’ core values and recognize the efforts of a new generation who are putting them into action in their local communities,” said Zachary Zehner, chairman of the board at Mannington Mills. “We are proud of these students and wish them well in their future endeavors, both academically and throughout their careers.”

Salem scholarship recipients

Sabrina Chamberlain is the daughter of Mannington associate Rob Chamberlain. She graduated from Pennsville Memorial High School. She plans to attend Salem Community College in Carneys Point, N.J., in the fall.

Chamberlain has volunteered at Fort Mott cleanup events. She also helped during concerts and book fairs at local elementary schools. In addition, she fostered kittens for her local humane society. She is also a member of the National Honor Society and Tri-M, the national music honor society.

Emma Hankin graduated from Pennsville Memorial High School and plans to attend Cedarville University in Cedarville, Ohio, in the fall.

Hankin has volunteered as a Little League International Challenger League baseball buddy for teens with disabilities. She also has served as a peer mentor and peer tutor for younger students.

Hankin served on Arts Ed NJ’s Youth Art Ed Council, a group of 21 high school students from across the state who champion arts education in their schools and communities.

Calhoun scholarship recipients

Alyssa Montelongo is the daughter of Mannington associate Gabriel Rivera. She graduated from Southeast Whitfield High School and plans to attend Georgia Institute of Technology in Atlanta in the fall. She will pursue a degree in biomedical engineering.

Montelongo’s community service has spanned many age groups and interests. She helped raise funds for research to find a cure for HLH, a rare autoimmune disorder and assisted with local river cleanup efforts.

She also has volunteered for school STEM activities, Special Olympics events, sports camps and food drives at local food banks.

Peyton Stone is the daughter of Mannington associate Josh Stone. She graduated from Calhoun High School and plans to attend Dalton State College in the fall. She will pursue a degree in elementary education.

Stone has focused on helping children in her community. She has volunteered at Calhoun Early Learning Academy, assisted in a second-grade classroom at Calhoun Primary School and worked as a floater at Northwest Georgia Christian Academy.

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Havencrest Surfaces aquires PanTim distributor business

Tyler Geren, CEO of Havencrest

Dalton—Havencrest Surfaces, a wood-focused distribution company affiliated with Infinity Floor, has completed the purchase of the assets associated with the distributor business of PanTim Wood Products, a long-standing wood flooring provider based in Scarborough, Maine.

Under the terms of the acquisition, PanTim will continue to serve its other customer channels, while Havencrest Surfaces will become the distribution platform for PanTim’s distributor customers, according to Tyler Geren, Havencrest CEO.

Havencrest was created specifically to serve the North American distribution channel through a distributor-only model focused on hardwood flooring programs, supplier relationships, inventory stability and service-based execution. The company will be supported by Infinity Floor’s infrastructure, approximately 197,000 square feet of warehouse and distribution space, logistics capabilities and customer service platform here.

PanTim, led by Harro Jakel, president, has built a respected position in the hardwood flooring industry over several decades through design, wood flooring expertise, supplier relationships and a reputation for quality and reliability. As the distributor business transitions, Havencrest Surfaces will carry those programs forward with a focused distribution model.

“PanTim has been built over many years of relationships, consistency and trust,” Jakel said. “Our priority was finding a path that would respect those relationships and support them into the future. Tyler Geren has built a company that will do that.”

Jakel and Rick Knowles, vice president of sales for PanTim, will remain engaged during the transition to help support a smooth transfer of knowledge, relationships and market expertise.

For Geren, the focus now is execution. “We know the announcement is only the first step,” he said. “What matters now is execution. That means disciplined inventory, clear communication, dependable service and making sure customers see continuity from day one. We respect the relationships that made this business valuable, and we understand the responsibility that comes with carrying them forward.”

Infinity Floor’s existing SPC and LVT business will continue operating independently under its current structure, with dedicated focus and resources remaining in place for those categories. The Havencrest business will be supported by Infinity Floor’s existing operations, customer service, logistics and management team.

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Stats 2026: Commercial market seeks to find footing

The commercial flooring industry spent much of 2025 trying to find its footing. Faced with tariffs, high interest rates, labor shortages and cautious spending, the supply chain navigated a market where uncertainty often proved the biggest obstacle.

Despite the uncertainty, though, the commercial flooring sector eked out gains in 2025, rising 1% to $7.091 billion in sales, FCNews research shows.

While some sectors maintained steady demand, others hit the brakes on projects as rising costs and economic concerns reshaped investment decisions. Return-to-work mandates and corporate investment, for example, fueled office projects in select markets across the country.

“The workplace segment continues to be the leading segment for our members,” Mark Bischoff, Starnet president and CEO, told FCNews. “That’s very closely followed up by the combination of K-12 and university work.”

The healthcare segment, fueled by an aging population combined with people living longer, remains one of the more active markets. “We’ve really seen a dramatic increase in ambulatory and outpatient care work,” Bischoff noted.

That’s not to say the overall specified commercial contract market—which accounts for roughly 70% of commercial flooring activity—didn’t face its share of challenges in 2025. “Economic conditions in the form of tariffs and high interest rates impacted both the specified business and Main Street,” said Ben Elliott, Tarkett Commercial’s director, LVT product management. “High borrowing costs influence businesses of all sizes and delay both new construction and renovation projects.”

Still, several key end-use markets thrived. Here’s a look at how some of the major end-use markets shook out in 2025, along with the factors that impacted product specifications across some of the major flooring categories.

Healthcare

Healthcare remained one of the commercial market’s brightest spots in 2025, representing the largest share of business at approximately 44%, according to FCNews research. Driven by growing patient demand and the continued shift toward outpatient care, hospitals and healthcare systems invested heavily in new facilities and renovations designed to bring services closer to where people live and work. That trend fueled growth in ambulatory surgery centers, urgent care clinics and medical office buildings. It also reinforced healthcare’s reputation as a hard-surface-driven market, especially in acute care settings. Carpet tile maintains a presence in senior living communities, medical offices and behavioral health spaces where comfort and acoustics are important, according to published reports.

Infection prevention remained a key priority, influencing everything from facility design to flooring specifications. “The continued demand for hygienic, easy-to-clean and low-maintenance materials supported specification activity across outpatient facilities, medical office buildings, senior living projects and wellness-focused healthcare environments,” said Rocamador Rubio, director, Trade Commission of Spain.

But today’s healthcare spaces are about more than just function. Providers increasingly recognize the physical environment can influence patient outcomes, staff satisfaction and overall well-being, according to published reports. As a result, end users are incorporating warmer colors, nature-inspired visuals and hospitality-style aesthetics to create calmer, more welcoming settings.

“We’re seeing colors and design elements being used and trying to put both patients and healthcare workers in a state of mind that helps them to be successful,” said Yon Hinkle, AHF Products’ vice president of resilient.

Education

Education, the second-largest commercial sector with an estimated 25% market share, faced many of the same pre-COVID-19 market impacts: balanced budget pressures, changing enrollment patterns and growing demands for healthier, more adaptable environments.

K-12 schools represent the bulk of education construction activity and higher education makes up the remaining portion. The segment is increasingly embracing flexible learning environments designed for collaboration, technology integration and multipurpose use. As a result, flooring that can handle constant furniture movement, heavy foot traffic and evolving space needs are popular options.

“Ceramic tile continued performing well within corridors, cafeterias, bathrooms and shared common areas because of its longevity and ease of maintenance,” Tile of Spain’s Rubio pointed out.

Acoustics have become another key consideration. Hence the reason why carpet tile remains a go-to product in classrooms, libraries and collaborative spaces. But that is not the only solution that meets these needs.

“K-12 has now embraced LVT as an optimum product for acoustics, aesthetics and maintenance,” said Jeff Galloway, vice president, product management, Mohawk Group.

At the same time, budget concerns are forcing schools to focus on long-term value rather than upfront costs, industry observers said. Products that can be restored rather than replaced are attracting renewed attention. “We’re starting to see more demand for products like solid vinyl, particularly in education and healthcare,” said Jeff West, Shaw Industries’ SVP of brand strategy. “It’s a product you can come in and buff it and restore to its original state.”

Flooring manufacturers report growing interest in slip-resistant surfaces, products designed to withstand heavy foot traffic, and materials capable of supporting both academic and extracurricular activities. “What we are seeing in heavy traffic areas, in general, are customers in that space who became dissatisfied with the ability to keep LVT maintained or looking like new,” AHF’s Hinkle said. “Major school systems have made changes back to VCT.”

Rubber, linoleum and ceramic tile are also gaining traction as schools modernize classrooms, student housing and shared campus spaces.

These issues are influencing everything from classroom layouts to flooring choices. “There is a conscious thought with all design elements that go into those spaces,” Hinkle added. “This plays a role on how buildings are being refurbished and how new buildings are being constructed.”

Corporate/office

The office market continued to evolve in 2025 as employers sought to bring more workers back into the office. After several difficult years, signs of recovery began to emerge. FCNews research showed this segment of the market increased its share slightly to 16% last year, up from 13% in 2024.

“The commercial market started coming back last year,” Shaw’s West said. “We started seeing activity pick up late into the year and continuing into this year.”

While office occupancy rates reached near record highs last year, the biggest changes took place inside office walls. Companies sought to reimagine existing spaces rather than expanding them, creating environments designed to encourage collaboration, flexibility and employee engagement. That shift influenced flooring choices.

“Renovation and repositioning projects within premium office environments continued supporting ceramic tile demand, particularly within lobbies, amenity spaces, cafés and collaborative common areas,” Rubio noted.

Resilient flooring, especially LVT, continued gaining share thanks to its durability, easy maintenance and attractive lifecycle costs, industry experts say. Carpet tile remained a popular option for collaborative areas because it offers design flexibility and minimal disruption during renovations. “Broadloom is losing share to carpet tile and hard surfaces in TI/property management applications,” Mohawk Group’s Galloway observed.

Overall, employee wellness emerged as a major influencer in workplace design. As companies worked to attract employees back to the office, they invested in spaces that promote comfort, better acoustics and healthier indoor environments. “The focus is on durability, acoustics and flexibility, as companies reconfigure spaces and invest in higher quality environments and more hard surface and resilient flooring products,” Starnet’s Bischoff explained.

By and large, product preferences reflected the industry’s search for value and performance. While soft surface sales decreased slightly last year, carpet tile continued gaining share, accounting for nearly 44% of commercial soft surface sales. “Customers today are balancing design, performance, sustainability and budget considerations more carefully than ever,” said Jim McKeon, vice president of sales, Interface.

Hospitality

The hospitality sector continued its slow, post-pandemic recovery as resurging leisure travel, property renovations and a growing appetite for unique guest experiences fueled investments across hotels, resorts and entertainment venues. For many operators, creating memorable spaces became a key differentiator in an increasingly competitive market.

Holding relatively steady at about 12% of commercial flooring sales, the hospitality market spans hotels, restaurants, entertainment venues and recreation facilities. Designers increasingly turn to bold patterns, custom flooring visuals and natural-inspired materials to create distinctive environments throughout lobbies, guestrooms and public spaces.

“Flooring supports design differentiation and brand experience while systems supporting room turns and refreshes are increasingly important in this highly competitive segment,” Starnet’s Bischoff said.

Take broadloom, for example. “Some hospitality spaces want large-scale patterns that are not cut and have areas where they need products over balconies and steps,” Shaw’s West said. This falls right into broadloom’s wheelhouse.

Hotels expanded beyond traditional guestrooms, adding co-working spaces, wellness centers, flexible meeting areas and social gathering spots to generate additional revenue streams. These multipurpose environments, observers say, require flooring that can perform across various uses while maintaining comfort and visual appeal. “Carpet, particularly broadloom, remains the flooring of choice for most of the hospitality industry, although LVT is becoming more common in low-mid priced chains,” Mohawk’s Galloway said.

That’s not to say that alternate materials aren’t being considered and/or utilized more frequently in these spaces. “Many mid-scale properties are replacing guest room broadloom carpet with LVT for simpler cleaning routines and longer replacement cycles,” Tarkett Commercial’s Elliott noted.

Many executives, including Interface’s McKeon, continue to see strong demand for modular flooring solutions that deliver design flexibility, performance and sustainability. Hence the reason why Broadloom maintained a strong presence in hospitality, senior living and corporate interiors.

On the hard surface side, resilient flooring remained the market leader, maintaining approximately one-third share of commercial sales, according to FCNews research.

Retail

The retail sector, the smallest of the bellwether end-use markets, continues its climb out of the post-pandemic doldrums. Estimated at less than 7% of the overall contract commercial market, brick-and-mortar retail ceded significant share to the digital realm, research shows. Still, retailers spent 2025 keeping pace with digital shopping habits while giving consumers a reason to visit physical stores. As a result, flooring played a larger role in shaping the shopping experience, helping store operators create inviting, brand-focused environments that encourage customers to linger longer.

“Mass retailers will work LVT into certain areas for a design element, such as in a grocery area or aisle,” AHF’s Hinkle pointed out. “In smaller spaces, we’re seeing a lot of LVT being utilized, and variations of engineered wood and laminates going into those spaces.”

From grocery stores to specialty boutiques, flooring choices increasingly reflected both design and durability needs. Retailers sought materials that could handle heavy foot traffic, rolling carts and frequent cleaning while maintaining a fresh appearance. “Retailers often opt for polished concrete over carpet or LVT especially in the big box stores,” Mohawk’s Galloway noted. “LVT is often the product of choice for high-traffic locations like grocery, telecommunications, food/ beverage and big boxes, while carpet remains strong in department stores and specialty retail.”

The retail landscape closed out the year with solid momentum despite economic uncertainty, according to the CNBC/ NRF Retail Monitor, powered by Affinity. Leading the charge are hard surfaces that offer long-term value. “Tile continued performing strongly within restaurants, grocery environments and mixed-use retail projects, with wood-look and stone-look porcelain surfaces remaining especially popular,” Tile of Spain’s Rubio said.

Soft surfaces continue to play an essential role, with carpet tile the leading product in areas requiring quiet and comfort. Meanwhile, polished concrete emerged as a popular option for larger retail formats seeking a cost-effective, low-maintenance solution.

“A lot of new retail work is moving to polished concrete since it is lower cost and easier to maintain,” said Geoff Gordon, executive director, Fuse Alliance.

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Tuesday Tips: Set the tone, shape the sale

Dalton—The World Floor Covering Association (WFCA) released a new “Tuesday Tips” this week. In the series, WFCA experts present short video tips for improving customer service and optimizing staff performance. In the end, it’s all about understanding the importance of doing 100 things just 1% better than your competition.

In this week’s Tuesday Tips, Tom Jennings, retail training expert, explains how a salesperson’s attitude can shape a customer’s mood and response. A positive tone can make all the difference.

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Parador launches desert-inspired Maradune wood collection

Coesfeld, Germany—Parador has introduced Maradune, a new engineered wood flooring collection inspired by the world’s great deserts. The collection aims to translate the natural colors of those landscapes into flooring tones that range from light to dark.

Parador designed the warm, tranquil palette to offer balance and versatility. The floors appear calm from a distance while revealing more detail up close.

The company’s proprietary SurfaceON technology embeds subtle imagery into the flooring surface. The visuals shift based on the angle of light and the viewer’s perspective. The effect gives the floor a changing appearance throughout the day.

“Maradune floors are made for the senses,” said Neel Bradham, CEO of Parador. “We wanted people to notice something new every single day. That’s the kind of floor that becomes part of a space rather than simply sitting beneath it.”

Parador manufactures the collection in Güssing, Austria. The company creates the surface texture through alternating partial wave planing and natural deep brushing.

The process highlights the oak’s natural grain and knots. It also gives each plank a more organic and distinctive character. The textures become more or less prominent depending on the angle and intensity of the light. This creates a living, ever-changing appearance.

Each plank also features a four-sided bevel. The detail defines the individual planks while contributing to a cohesive overall look. Maradune uses an automatic click system with longitudinal and end-edge locking. The system supports straightforward installation.

The engineered construction includes a 3.6mm top layer. The flooring is also compatible with underfloor heating systems. Parador designed the collection for residential and commercial applications.

The company backs the collection with a 25-year guarantee. Maradune also carries several sustainability and quality certifications, including FloorScore and Blue Angel.

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