As we start to close out 2025, the HVAC residential market finds itself in unfamiliar territory. After years of robust growth, the industry is experiencing an unexpected slowdown. It’s forcing contractors and manufacturers alike to reassess their strategies.
In this blog, we’ll dive into the key HVAC trends shaping the market. We’ll also explore how HVAC businesses can position themselves for success in 2026.
The Current State: A Sobering End to 2025
The residential HVAC market is ending 2025 on a somber note. Major players in the industry are reporting significant declines in sales volumes. This reflects a broader trend of economic pressure and shifting consumer behavior.
Lennox, a leading manufacturer, reported declining residential revenue, with unit sales dropping by over 20%. This isn’t an isolated incident.
These declines come on the heels of an economic slowdown during a government shutdown. And it’s creating two key trends that are setting the stage for a slower Q4.
Trend 1: Macroeconomic Headwinds and the “Repair over Replace” Phenomenon
The primary challenge facing the HVAC residential market in Q4 is the strain on consumer wallets. High interest rates have made financing new systems more expensive. And persistent inflation continues to erode discretionary spending. This economic pressure is compounded by slowing home sales, traditionally a key driver of HVAC replacements.
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
How can you adapt? Implementing HVAC Maintenance Plans
For contractors, this shift means adapting service offerings and adjusting revenue expectations. It’s crucial to have efficient systems in place to manage a higher volume of repair jobs while maintaining profitability. Offering HVAC maintenance plans is a great way to adjust to the changing consumer market.
Regular maintenance plans will ensure your customers’ equipment keeps running smoothly. It also creates recurring revenue for your business. When generating HVAC leads, you might focus your advertising on your maintenance services.
A tool like WEX Field Service Management helps you build maintenance plans, schedule appointments, and manage customer accounts. That way you can focus on providing quality service.
Trend 2: Navigating the A2L Refrigerant Transition
The industry-wide transition to lower-Global Warming Potential (GWP) A2L refrigerants is adding another layer of complexity to the market. This shift, mandated by environmental regulations, is creating short-term volatility in several ways:
- Inventory Destocking: Distributors are rushing to sell off existing R-410A equipment before installation deadlines hit in early 2026. This aggressive de-stocking is depressing new unit shipment volumes for manufacturers.
- Supply Chain Friction: The rollout of A2L-compliant systems hasn’t been smooth. Earlier shortages of R-454B refrigerant cylinders shook dealer confidence, causing many to hesitate on pushing new installations.
Increased Equipment Costs: Higher upfront costs due to A2L-compliant additional safety features further drive consumers towards the repair option.
What can you do? Gain Access to Direct Manufacturer Orders
Despite these challenges, the transition to A2L refrigerants is gathering momentum. Recent reports suggest that A2L equipment has surpassed the 50% market share milestone in some segments. This indicates that the industry is adapting, albeit with some growing pains.
With inventories depleting, ordering directly from manufacturers can be a huge advantage. Using a tool like WEX FSM, you can gain access to supplier catalogues. You’ll be able to see your most used equipment and order complete systems directly from manufacturers.
Looking Ahead: An Optimistic View on 2026
While the current market conditions are challenging, there’s reason for optimism as we look towards 2026. Industry executives maintain that the fundamentals of the residential HVAC business remain strong. Today’s pressures are expected to be short-term headwinds. There are several “green shoots” anticipated in the coming year:
- Inventory Normalization: The aggressive de-stocking we’re seeing now should lead to more stable inventory levels in 2026.
- Potential Economic Relief: Any softening of interest rates could reignite home sales and boost consumer confidence in making large purchases.
- Smoother A2L Transition: As the industry becomes more familiar with A2L systems and supply chains stabilize, we should see reduced friction in this area.
The current market, while painful, is setting the stage for a stronger and more resilient market in 2026.
Preparing for Success with WEX Field Service Management
As the HVAC industry navigates these challenging times, having the right tools and systems in place is crucial. This is where WEX Field Service Management comes into play. Our platform helps HVAC businesses increase cash flow and adapt to changing market conditions.
Here’s how WEX FSM can help you prepare for a successful 2026:
- Efficient Job Management: Our system simplifies appointment scheduling and dispatching, so you can focus on service.
- Mobile Invoicing and Payments: With on-site invoicing and payment collection, you can improve cash flow and reduce administrative overhead.
- Inventory Tracking: Stay on top of your equipment and refrigerant inventory, crucial for navigating the A2L transition.
- Customer Relationship Management: Build stronger customer relationships with detailed service histories and communication tools.
- Reporting and Analytics: Gain insights into your business performance to make data-driven decisions in a volatile market.
By leveraging WEX Field Service Management, HVAC businesses can position themselves to thrive in 2026. Our platform’s flexibility allows you to adapt quickly to changing consumer preferences. Whether it’s an increase in repair jobs or a surge in system replacements, you’ll be ready as the economy improves.
Learn more about WEX FSM and schedule a demo today.
CRM FAQs
We understand that choosing the right CRM solution can be daunting. Here are answers to some common questions about WEX FSM’s CRM software:
Our CRM is designed for seamless integration with a wide range of business tools, including accounting software, GPS tracking systems, and more. We offer API access and dedicated support to ensure a smooth transition.
Absolutely! WEX FSM’s mobile app gives technicians full access to customer information, job details, and inventory data all from their smartphone or tablet.
Our CRM includes robust inventory management features, allowing you to track parts across multiple locations, set reorder points, and even predict future inventory needs based on historical data.
