Consumer HVAC buying indicator falls in Q1, remains above 2022 levels

U.S. consumer sentiment fell for the fourth consecutive month in April, and is down 32 percent year-over-year, according to the University of Michigan’s flagship survey released on Friday. 

The big picture: “Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead,” said survey director Joanne Hsu. 

What’s happening: Beyond overall sentiment, the survey also asks whether consumers think now is a good or bad time to buy “large household durables,” including appliances, providing the closest gauge of purchasing intent for HVAC systems.

• During the first quarter, the latest available data, consumers across all income levels believe that now is a worse time to buy compared to Q1 last year, with the percentage of those marking ‘good time’ dropping 12 percent. 
• The decline was strongest among those in the bottom third, income-wise, where positive responses fell 16 percent. 

Yes, but: Compared to the same quarter in 2022, when the Federal Reserve announced its first interest rate hike, the percentage of consumers who believe now is a good time has increased by 22 percent.

• Unsurprisingly, high-income households — top-third earners — drove the growth, with positive responses jumping 79 percent compared to 2022. 
• Of note: Despite the overall improvement, the bottom third was the only group still more hesitant than in 2022, with positive responses down 17 percent. 

Zoom out: The findings come as shipments of central air conditioners and heat pumps through February of this year, which do include those for new construction, are up compared to 2024. 

• What to watch: While sentiment has fallen, and uncertainty looms, the replacement outlook remains promising, as the 5.1 million ACs and heat pumps shipped in 2010 reach the end of their useful lives. 

What’s next: Preliminary consumer sentiment data for next month will be released on May 16.