The effects of these factors are clearly seen in the AHRI’s final report of 2025. Even so, some product shipments moderately outpaced 2024, such as warm-air furnaces and commercial water heaters.  

Air Conditioners and Heat Pumps 

The most prominent declines in December shipments were a/c units and air-source heat pumps. Their combined shipments were down 21.4% compared to December 2024. Of the two, a/c shipments saw the steepest decline, down 35.9%, while heat pumps decreased by 2.4%.  

This was the seventh month in a row where both types of products had lower shipments compared to the previous year. 

• Air conditioner units and air-source heat pumps: 408,244, down 21.4% from 519,326 

• Air conditioners only: 188,715, down 35.9% from 294,336 

• Heat pumps only: 219,529, down 2.4% from 244,990 

It’s worth noting, however, that a/c and heat pump shipments increased compared to November 2025 by 7.58%. This reversal has not occurred since 2019. Shipments are typically better in the summer months due to seasonality.  

Declines were seen in the year-to-date totals. Year-end totals compared to 2024 were: 

• Air conditioners and heat pumps: 7.75 million, down 20% from 9.68 million 

• Air conditioners only: 4.10 million, down 26.2% from 5.56 million 

• Heat Pumps only: 3.64 million, down 11.6% from 4.12 million 

These are drastic shifts when examining 2024’s totals compared to those from 2023. In that period, combined shipments of a/c and heat pumps went up by 11.8%, and a/c only shipments increased by 10.3%. Heat pumps also increased by 14% at that time. 

Warm-Air Furnaces 

Gas furnace shipment totals in December 2025 remained the same compared to December 2024, while oil furnace shipments saw a significant increase in the same period.  

• Gas warm-air furnaces: 267,065 units, a 0% change from 267,059 units 

• Oil warm-air furnaces: 4,058 units, up by 31.5% from 3,087 units 

Of the main product categories, warm-air furnaces were among those that experienced increases in yearly shipments when compared to 2024’s totals. The year-end total shipments were: 

• Gas warm-air furnaces: 3.25 million, up 4.1% from 3.12 million 

• Oil warm-air furnaces: 32,799, up 9.2% from 30,036 

Warm-air furnaces experienced larger increases from 2023 to 2024 when stacked against this year’s totals. Gas units were up 4.4% at the time, while oil units saw a 32.8% increase over 2023. 

Residential Storage Water Heaters  

Gas and electric water heaters saw modest growth in December compared to 2024’s monthly totals: 

• Residential gas storage water heaters: 418,518 units, up 19.3% from 350,875 units 

• Residential electric storage water heaters: 462,252 units, up 16.8% from 395,719 units 

The year-end totals, however, bear out a different tale, experiencing incremental increases or decreases compared to 2024’s totals: 

• Gas residential storage water heaters: 4.25 million, up 1.8% from 4.18 million 

• Electric residential storage water heaters: 5.03 million, down 0.6% from 5.06 million 

AHRI’s year-end data shows these fluctuations resemble 2024’s totals compared to 2023, where gas units were down by 2.7% for the year, and electric was up by 3.1%. 

Closing 2025 

Though there were significant decreases in a/c and heat pump shipments, the data shows 11% more heat pumps (3.64 million) were shipped in 2025 than gas warm-air furnaces (3.25 million). Even though the incentives that drove the adoption of heat pumps have largely disappeared, the overall trend toward electrification might continue this push into 2026. 

Despite this, there is still a need for gas-based units, as not all homeowners are ready to go all-electric. Dual-fuel and hybrid systems are growing in popularity, as they provide customers with the flexibility to choose their energy source depending on their needs. 

HVAC equipment manufacturers recently reported their Q4 2025 results, with companies like Carrier and Lennox showing slumps in sales that reflect the shipment data. 

Carrier closed 2025 with a nearly 40% decline in residential HVAC business. Residential unit volume declined more than 40%, while light commercial fell 29%. It was steeper than company leadership expected, but did follow several years of strong demand. 

“Between 2020 and 2024, our industry averaged 9.7 million units for a cumulative overage, so to speak, of about 3.5 million units,” said David Gitlin, chairman and CEO, during an earnings call. “Last year, we estimate our industry delivered about 7.5 million units, so we absorbed about 45% of that overage. We are assuming that we absorb the balance in 2026.”

Lennox reported overall revenue declined 11% in the fourth quarter, including a 21% decrease in Home Comfort Solutions revenue. This was due in part to the first full year of transitioning away from R-410A. The company estimated that roughly 40% of its residential mix still involved R-410A equipment as of 2025, which is shifting this year. 

“That 40% of R-410A is gone, and it’s all going to be R-454B,” said Alok Maskara, CEO of Lennox.  

Meanwhile, Trane Technologies saw organic bookings up 22% from Q4 2024, which was led by commercial HVAC in the Americas. Revenue was reported at $5.1 billion, up 6% from Q4 2024. 

“Thanks to our purpose-driven strategy, talented team and disciplined execution, 2025 was another strong year for our company,” said Dave Regnery, chair and CEO. “We achieved strong revenue growth, adjusted earnings per share growth, and free cash flow conversion, despite challenging markets in residential and transport refrigeration.”