The furniture sector has experienced varied price changes since February 2020, influenced by inflation, supply chain factors, and trade policies.
Price Changes
Data from the Bureau of Labor Statistics indicates that bedroom furniture prices have risen by 11% since February 2020. Over the same period, living room, kitchen, and dining room furniture prices increased by 25%. This contrasts with overall inflation, which has seen a nearly 26% rise since February 2020, suggesting that furniture price growth has generally lagged behind broader inflation. Industry experts note that prices have also decreased from their peak in 2022. Historically, mass-market options, such as a $399 sofa available since 1984, persist in the market today, distinguishing furniture from other high-cost consumer goods.
Factors Influencing Costs
Furniture manufacturers and sellers report higher operational expenses, including utilities, insurance, and wages. The COVID-19 pandemic significantly impacted the industry, driving increased demand for home office and patio furniture while simultaneously causing shipping costs to surge.
The furniture market is characterized by low barriers to entry and fragmentation, leading to intense competition that pressures prices downward. Competition extends beyond new furniture to include second-hand goods and consumer priorities like travel or home repairs.
Manufacturing trends show a consistent move towards regions with lower labor costs over the past six decades. While U.S. wages are higher and environmental standards more stringent, many components, such as fabrics, handles, and electronic parts, are sourced internationally, primarily from China, even for domestically assembled products.
Impact of Tariffs
During the first term of President Trump's administration, tariffs imposed on Chinese furniture imports led to a redirection of manufacturing to other countries, notably Vietnam. More recently, President Trump has implemented increased tariffs on imports from a broader range of countries. New double-digit tariffs specifically target kitchen cabinets, vanities, and upholstered furniture.
In June, Ashley Furniture announced price increases across most of its product lines as a direct consequence of these tariffs. The Home Furnishings Association, an industry trade group, has issued warnings regarding potential cumulative cost increases for both retailers and consumers.
Consumer Response
Despite a stated preference for American-made goods, consumer purchasing decisions are often driven by price discrepancies. For instance, an American-made item costing $1,200 compared to an imported alternative at $500 frequently leads consumers to select the imported option due to affordability. Many households face rising costs in other essential categories, such as health and car insurance or groceries, impacting their discretionary spending on items like furniture. This economic pressure can result in consumers delaying or postponing the replacement of furniture.