“The most vigorous spending has come from the nation’s top 10% of earners, who have gradually come to account for nearly half of national spending,” they write.
Furthermore, the article states that many economists see this as a warning sign because spending by wealthy Americans is far outpacing that of the rest of the populace. If that spending falters, coupled with a downturn in the housing or stock markets, things will go south quickly.
Whalen and Wolfe also state that younger and middle-income consumers are cutting back on spending due to inflation and other factors. They add, “Americans’ disposable personal income remained flat after inflation, despite their robust spending. The savings rate fell to its lowest level since 2022.”
Consumer Confidence
It’s important to note that consumer confidence dropped in December, marking the fifth consecutive month of declines.
In response to these challenges, there’s been a significant shift in consumer behavior. Homeowners are increasingly opting to repair their existing HVAC systems. Several factors drive this “repair over replace” trend:
- Sticker shock from escalating equipment costs
- The desire to extend the life of current units in the face of economic uncertainty
- Hesitation to take on large capital expenditures in a volatile market.
Most economic outlooks suggest residential demand may start slowly in early 2026. Interest rates remain a concern, so consumers are more cautious. But homeowners don’t stop needing comfort. Instead, they become more careful buyers. They ask better questions, like:
- Why is my home uncomfortable?
- What’s actually wrong?
- How does your solution fix the problem?
- How will I know it worked?
That thinking shift favors High-Performance HVAC™ contractors. Why? Because instead of guessing, you test. Instead of promising, you measure. Instead of hoping, you verify. In a cautious market, proof matters — and proof builds trust.
The Market Growth Outlook Is Real, But Won’t Lift Everyone
Most outlook studies I look at say that the residential HVAC market should still grow through 2026 and beyond, driven by five key factors:
- Aging housing stock
- Electrification and heat pumps
- Energy efficiency requirements
- IAQ and comfort awareness
- Smart controls and connected homes.
In the AHR 2026 Trends Report, Steve Yurek, president and CEO of AHRI, says that “Keeping essential heating, cooling, water heating equipment affordable in light of eliminated tax credits and increased tariffs is probably the most pressing issue facing manufacturers.”
He also cites keeping ahead of the impact of global tariffs as a continuing, complex challenge.
But market growth doesn’t lift all contractors equally. Those who rely solely on equipment replacement will feel pressure from tighter margins, higher marketing costs, and greater price shopping.
High-performance contractors operate differently. They sell outcomes, not boxes.
How? By discovering and solving real airflow problems. They understand how duct deficiencies affect comfort and energy use, and know how to fix them. And by testing, they can address comfort, humidity, and indoor air quality (IAQ) together.
The truth is, HVAC work doesn’t disappear in a slower market — it becomes more valuable.
Existing Homes Will Drive Opportunity
With new residential construction still uneven, 2026 continues to favor existing homes. And existing homes are full of performance problems that have never been measured, much less corrected, including:
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