The sputtering US housing market is hurting the businesses that depend on Americans opening their wallets to fix up and furnish their new homes, reported local media.
According to data firm Coresight Research, retailers announced more US store closures than openings in 2024, reversing a two-year trend of net openings.
“Home retailers were one of the biggest drivers of the contraction, with companies such as Big Lots and Conn’s filing for bankruptcy and announcing plans to close hundreds of locations,” noted the report on Tuesday.
Subdued home sales helped tip some already struggling businesses over the edge, even though there were signs of improvement in the housing market in late 2024. Existing-home sales rose in November, chalking up their biggest year-over-year gain in over three years, Xinhua news agency reported, quoting The Wall Street Journal (WSJ).
However, overall, purchases of previously owned homes in 2024 were expected to hit the lowest level since 1995. Also, with mortgage rates back up to high levels from the summer of 2024, sales activity is likely to slow in the coming months, the report said.
The housing sales slowdown for most of 2024 hurt companies such as LL Flooring, which filed for voluntary Chapter 11 reorganisation proceedings in August, and home retailers were also pressured by a cool-down in demand for furniture and home-improvement materials following a surge in spending on these items when many Americans were stuck at home because of the pandemic, it added.
The annual report from the US Department of Housing and Urban Development (HUD) revealed that 771,480 people were experiencing homelessness on a single night in January 2024, marking an 18.1 per cent increase from 2023.
The most dramatic increases occurred in Illinois, Hawaii, and other states struggling with housing affordability challenges and surges in migrant arrivals.
