US Resi HVAC tracker (October): Signals and sentiment remain weak; no line of sight to recovery

Last month, we published the first iteration of our residential HVAC tracker. Since then, most indicators around the residential market continue to remain weak or deteriorated further. AHRI shipments optically continue to look promising, but this is off very weak 2025 comparables and remains down on a two-year stack, while HARDI TTM growth is only ~3.4%. Mortgage rates in the low-to-mid 7% range continue to pressure both new and existing home sales, and housing supply remains elevated. Consumer and builder sentiment are extremely weak, with the NAHB housing market index at its lowest since 2012. We believe residential HVAC is at a trough, but see no near-term catalyst and expect it to bounce along the bottom in the near to mid term. We rate CARR Market-Perform (TP $64), TT Outperform (TP $575) and FERG Outperform (TP $325).