Holiday Sales, a Fed Rate Cut, and Housing Completions

Originally published December 18, 2024. This version was rebuilt from the Census Bureau's retail and new residential construction reports and the Federal Reserve's statement for the FIN archive, and the facts are as of that date.

Mid-December 2024 brought holiday sales data, another interest rate cut and a strong month for finished homes. Each one mattered for furniture demand in early 2025.

The short version

• Census said furniture store sales rose 0.3% in November and 0.7% from a year earlier.
• The Fed lowered the federal funds target range to 4-1/4 to 4-1/2 percent.
• Census and HUD said November completions were 1,601,000, up 9.2% from a year earlier.

Furniture retail sales on the rise

The Census Bureau's advance report showed furniture and home furnishings store sales up 0.3% in November from October and 0.7% from November 2023. Total retail and food services sales rose 0.7% to $724.6 billion and were up 3.8% from a year earlier.

A small gain after October's drop suggested furniture stores were holding steady into the holidays rather than surging. Other categories were growing faster.

The Fed cuts again

On December 18 the Federal Open Market Committee decided to lower the target range by 1/4 percentage point to 4-1/4 to 4-1/2 percent. The statement said the committee would weigh incoming data before any further adjustments.

Lower short-term rates help retailers that finance inventory and shoppers who use promotional credit. Mortgage rates, which follow longer-term bonds, did not necessarily fall with them.

Completions hold up

Privately owned housing completions ran at an annual rate of 1,601,000 in November, 1.9% below October but 9.2% above November 2023. Housing starts fell to 1,289,000, 14.6% below a year earlier.

Strong completions support furniture demand over the next few months, since each finished home needs furnishing. Falling starts point to a thinner pipeline later in 2025.

Key takeaways

Furniture stores were steady, rates were lower and completed homes were plentiful. The weak spot was new construction, which would shape demand later in 2025.

Related on FIN

• Furniture Store Sales Fell 2.7%. Every Other Category Grew.
• Move-In Furniture Tickets Are Drying Up

Sources

• U.S. Census Bureau, Advance monthly retail sales, November 2024
• Federal Reserve, FOMC statement (Dec. 18, 2024)
• U.S. Census Bureau and HUD, New residential construction, November 2024