Shipments of central air conditioners and heat pumps tumbled in July — down nearly 27% compared to last year, according to AHRI data. A/C units took the steepest hit, falling more than 30%, while heat pump shipments dropped 18%. Those numbers line up with what was heard at the Morgan Stanley Laguna Conference, where manufacturers from Carrier, Trane, Lennox, and Watsco all said the residential HVAC market is facing one of the toughest stretches in more than a decade. Carrier is projecting third-quarter residential volumes will be down over 40% year-over-year — its sharpest decline in more than ten years. Trane is expecting up to a 20% drop, and Lennox points to tariffs, refrigerant shortages, and weak home sales as major challenges. Still, distributors like Watsco say pricing is holding steady, and they’re investing in contractor programs now to help drive replacements when demand rebounds — which most leaders expect to happen in 2026.

You can read more about the latest shipment data and what industry executives are saying about the market here and here.