A New York Times report revealed that furniture stores in the U.S. are increasingly struggling as the housing market remains frozen due to high mortgage rates and home prices. The state of the housing market has resulted in fewer people looking to furnish their homes with thousands of dollars’ worth of furniture, and this has had an adverse effect on the industry.
The report mentioned Circle Furniture, a 70-year-old family business which saw its sales plummet 20% last year. In December 2025, the retailer abruptly closed all nine of its stores, went bankrupt and began liquidating its assets.
“There’s going to be a lot of competition that’s not going to make it through these times,” Gary Friedman, chief executive of the upscale furniture retailer RH, told investors on a conference call in April. “There’s been greater fallout in the furniture business over the last few years than at any time in history.”
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Annual sales for furniture stores are down about 8 percent since 2022, according to
the Commerce Department. This year has also gotten off to a slow start, with January sales at their lowest since the pandemic. Mortgage rates have also climbed ever since the Iran war began.
“As long as housing turnover is at near record-low levels, there’s just less of a market for furniture and home furnishings,” said Zak Stambor, a senior analyst of retail and e-commerce at eMarketer, a research firm. “It’s increasingly a sink-or-swim environment.”
Circle had outlasted many of its peers. Conn’s, the Texas-based owner of Conn’s HomePlus and Badcock Home Furniture & More, shut all 550 of its stores across 15 states in 2024. A few months later, American Freight, an Ohio chain that specialized in discount furniture and mattresses, closed all of its 328 locations. Its parent company, Franchise Group, said at the time that the business “struggled due to sustained inflation and macroeconomic challenges facing the large durable goods sector.”
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Last year, smaller retailers such as Worthy’s Run Furniture, 5th Avenue Furniture, Walker Edison and Brenmark, the parent company of Landmark Furniture, all filed for bankruptcy.
“It’s a matter of survival,” said Stacey Widlitz, president of SW Retail Advisors, a research firm. “It’s not just the housing market they have to wrestle with.”
In addition to the state of the housing market, the furniture industry has also faced challenges because of the tariffs imposed last year. The United States placed 25 percent tariffs on imported furniture and cabinets, with increases scheduled for next year that would raise levies to as much as 50 percent for some products. However, the downturn is also affecting U.S.-based products.
Ashley Furniture, the largest furniture manufacturer in the United States, is shutting down a plant in Texas and cutting more than 250 jobs, including upholstery workers and machine operators, according to a regulatory filing.