U.S. Residential HVAC Market Size - By Product Type (Heat Pump, Split Air Conditioners, Furnace), By Installation (New Construction/Retrofit), By Application, By Distribution Channel & Forecast, 2024 – 2032

U.S. Residential HVAC Market Size

U.S. Residential HVAC Market was valued at around USD 14.2 billion in 2023 and is anticipated to register a CAGR of 7.3% between 2024 to 2032, due to the growing housing market and urbanization. As cities expand and new housing developments emerge, the demand for modern and efficient HVAC systems increases. New homes in suburban and urban areas need state-of-the-art heating, ventilation, and air conditioning units to ensure comfort and meet current energy efficiency standards. This trend is especially strong in regions with population growth, where new residential construction drives the demand for HVAC installations.
 

Further, besides new construction, the growing housing market also focuses on renovating and retrofitting existing homes. Many older homes in the U.S. have outdated HVAC systems that are less energy-efficient and more likely to break down. As the housing market grows, more homeowners are upgrading their HVAC systems to improve energy efficiency, reduce utility bills, and enhance comfort.
 

In the U.S. Residential HVAC market, strict and changing regulations on energy efficiency, refrigerant use, and emissions create significant challenges. Federal and state agencies, like the U.S. Department of Energy (DOE) and the Environmental Protection Agency (EPA), enforce these standards. Manufacturers must constantly innovate and upgrade their products to meet these new rules. This compliance is costly, affecting both manufacturers and consumers. Manufacturers face higher production costs to develop systems that meet these standards, leading to higher prices for consumers. This makes upgrading or replacing HVAC systems expensive. Additionally, navigating different state regulations adds to the complexity and cost of compliance.
 

U.S. Residential HVAC Market Trends

A prominent trend is the heightened emphasis on indoor air quality (IAQ). In recent years, particularly post-COVID-19, homeowners have recognized the paramount importance of clean air in their homes. Consequently, there's been a notable uptick in demand for HVAC systems that do more than just regulate temperature; they also filter out pollutants, allergens, and pathogens. Features like advanced filtration systems, UV light purifiers, and humidity control are becoming standard in today's HVAC units, reflecting consumers' prioritization of health and wellness at home.
 

Another significant trend is the movement towards electrification and the embrace of renewable energy sources. In line with global efforts to curb greenhouse gas emissions, there's a pronounced shift towards electric HVAC systems, especially heat pumps, which outshine traditional gas-powered systems in energy efficiency and environmental friendliness. This transition is bolstered by government incentives and evolving local building codes that increasingly endorse electric solutions over fossil fuels. Furthermore, there's a growing trend of integrating HVAC systems with renewable energy sources, notably solar panels. This integration empowers homeowners to sustainably power their HVAC systems, leading to reduced energy costs and diminished grid reliance.
 

U.S. Residential HVAC Market Analysis

Based on the product type, the heat pump segment was worth around 6.8 billion in 2023 and is anticipated to grow at a CAGR of 7.7% during 2024 to 2032. Heat pump systems optimize energy use and cost efficiency by switching between an electric heat pump and a gas furnace, depending on outdoor temperatures.
 

According to the U.S. Department of Energy, these systems leverage the efficiency of heat pumps during milder weather while relying on furnaces for extreme cold. The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) reports that geothermal heat pumps, which tap into the earth's stable temperature, can provide up to 70% savings on heating costs compared to traditional systems, albeit with high initial costs. Ducted heat pumps, utilizing a network of ducts for air distribution, are ideal for larger homes but necessitate significant ductwork. In contrast, ductless heat pumps, or mini splits, connect outdoor units to indoor ones, making them perfect for homes lacking ductwork or for adding targeted comfort.
 

Based on the installation, the replacement/retrofit segment held around 55% of the market share in 2023 and is anticipated to grow at a CAGR of 7.2% through 2032. Homeowners in the U.S. are increasingly upgrading to high-efficiency HVAC systems to reduce energy costs and enhance comfort. The trend is moving towards replacing older units with modern systems featuring higher SEER ratings and better performance. Variable-speed furnaces and heat pumps are popular for their consistent temperature control and lower energy consumption. Additionally, there is a growing interest in retrofitting homes with smart HVAC technology and advanced air filtration systems to improve indoor air quality and integrate with smart home setups.
 

The U.S. residential HVAC market size surpassed USD 14.2 billion in 2023 and is anticipated to grow at a CAGR of 7.3% during 2024 to 2032, due to its large housing sector, advanced technology, and strong regulations. The country's varied climate from cold northern areas to hot southern states creates a steady need for heating and cooling, making HVAC systems essential in most homes. Many U.S. homes have air conditioning and heating units. The U.S. government's focus on energy efficiency and sustainability, along with federal and state incentives, has sped up the move to more energy-efficient HVAC systems. This has driven innovation among manufacturers and increased the availability of high-performance units that meet the country's diverse climate needs.
 

U.S. Residential HVAC Market Share

The U.S. residential HVAC industry is consolidated, with prominent players, holding a market share of 35%-40% of the total market share. These companies are key players in providing a wide range of HVAC products and solutions, including heating systems, air conditioning units, ventilation systems, and smart home HVAC technologies.
 

U.S. Residential HVAC Market Companies

Major companies operating in the U.S. residential HVAC industry include:

• Amana
• American Standard
• Bosch Thermotechnology
• Bryant Heating & Cooling Systems
• Carrier Corporation
• Daikin
• Goodman Manufacturing
• Honeywell International Inc.
• Ingersoll Rand
• Johnson Controls
• Lennox International Inc.
• LG Electronics USA
• Midea Group
• Rheem Manufacturing Company
• Trane Technologies
   

U.S Residential HVAC Industry News

• In March 2024, Carrier announced the launch of its new energy-efficient heat pump line designed specifically for colder climates. The company claims these units can operate effectively in temperatures as low as -13°F (-25°C), expanding the potential market for heat pumps in northern states.
   
• In April 2024, Trane unveiled a partnership with a major home automation company to integrate their HVAC systems with smart home technology. This move aims to improve energy efficiency and user comfort through AI-driven climate control.
   
• In March 2024, Johnson Controls completed its acquisition of a smaller, innovative HVAC company specializing in ductless mini-split systems. This strategic move is expected to strengthen Johnson Controls' position in the rapidly growing ductless HVAC market segment.
   

This U.S. residential HVAC market research report includes in-depth coverage of the industry, with estimates & forecasts in terms of revenue (USD Billion) (Thousand Units) from 2021 to 2032, for the following segments:

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Market, By Product Type

• Heat pumps
  • Ducted
    • Vertical Discharge
    • Side Discharge
  • Ductless
• Split air conditioner
  • Ducted
    • Vertical Discharge
    • Side Discharge
  • Ductless
• Furnace
  • Gas Furnaces
  • Oil Furnaces

Market, By Application

• Residential
  • Single family
  • Multi family
• Light Commercial

Market, By Installation

• New Construction
• Replacement/Retrofit

Market, By Distribution Channel

• Direct
• Indirect

The above information is provided for the following country:

• North America
  • U.S.