• Installer capability is as critical as equipment efficiency. Workforce shortages elevate brands that simplify design and commissioning. Training academies, virtual reality modules, and certified dealer tiers improve quality and reduce callbacks.
  • Envelope and HVAC co-optimization is gaining traction. This is where high performance and building science come together. Programs increasingly couple HVAC upgrades with insulation, air sealing, and windows to reduce peak load and downsize equipment.
  • Affordability pressures. Consumers are hesitant when faced with high prices and low perceived value. Contractors who can prove results through testing and measuring can document clear lifecycle costs, offer financing options, and subscription maintenance to mitigate sticker shock.
  • Climate resilience and peak-load management shape designs. Heat waves and cold snaps demand robust low-ambient operation, surge protection, and backup strategies. Defenses against other calamities by Mother Nature are also attractive to potential buyers.
This outlook shows growth
  • Sustainability and transparency remain differentiators. Quiet operation, low refrigerant leakage, and grid-friendly controls align with green certifications. Contractors who offer verifiable documentation and procurement compliance are more attractive to green-minded consumers.

A Slow Start Changes the Conversation, Not the Need

Housing starts have been declining. According an outlook report on the Trading Economics website, the latest numbers show that, as of August 2025, U.S. housing starts fell 8.5% month over month to a seasonally adjusted annual rate of 1.307 million units.

This number is down from a slightly revised 1.429 million in July and well below market forecasts of 1.37 million. That is the fourth-lowest reading since May 2020.

On the HVACRTrends.com website, they quote several market outlook studies that cite changing demographics, interest rate pressure, and a softer rental market in 2026.

They say demographic trends are redrawing demand in the housing markets where younger buyers, specifically first-time buyers, continue facing affordability barriers.

According to this report, this matters on the HVAC side of things because:

  • Fewer entry-level new homes means fewer low-margin, high-volume opportunities
  • Mid-life buyers and older downsizers value reliability, comfort, and lower lifetime operating costs
  • Affordability migration will support demand in Sunbelt and second-tier cities, while expensive coastal markets lag.

“This is one of the clearest 2026 housing market implications for HVAC channel leaders: shift your focus toward premium comfort solutions and markets where demographic growth is actually happening,” the study says.

Consumer Spending

Consumer spending is all over the place. According to a Wall Street Journal article on December 23, 2025, the overall economy continues to grow despite factors such as the government shutdown, tariffs, immigration issues, and so on. Reporters Jeanne Whalen and Rachel Wolfe write that the engine, if you will, is consumer spending. But it’s not what you think.

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