Issue #00006 : December 25th, 2025

Happy Thursday and Merry Christmas, readers.

This quiet news week offers a chance to thank you, our founding subscribers. You are giving our first newsletters a shot, and I’m grateful. There’s much more ahead.

I’m often accused of being an eternal optimist, but this time I feel off-the-charts good about 2026. If mortgage rates drop further and thaw the housing market, if stocks keep climbing, if consumer spending stays positive—we’ll have the most favorable conditions our industry has seen in years. Add tariff clarity (less insanity) and controlled inflation, and 2026 could be the start of a well-earned golden age for our beloved industry.

But even if those dominoes don’t fall, massive opportunity is being created. No algorithm can replicate what we do, whether painting fabric, crafting furniture, or curating soulful interiors. AI can’t touch that.

But AI will transform how we work and open up massive opportunity to build businesses and create wealth. Smarter distribution, better project management, visualizations that create value before breaking ground—these tools will create massive revenue for businesses that adapt first.

Happy New Year! Let’s make this one the best one ever.

Rates are falling, but the market stays frozen.
Mortgage rates dropped to 6.21% this week—the lowest in a year, according to Freddie Mac. Yet nearly 30 million US households, 54% of primary mortgage-holders, have rates at or below 4% and refuse to move. They locked in when rates hit 3% or lower in 2020-2021.

This “lock-in effect” has paralyzed the housing market for three straight years. “We don’t expect to see this massive influx of home buyers, especially while mortgage rates are above 6%,” Hannah Jones of Realtor.com told the Wall Street Journal. “People can’t afford to move.”

I have to be honest: I contribute to this same housing market we all lament. I got lucky and locked in below 3% back in 2020. Even though our house isn’t perfect, to move with new financing would mean a huge jump in costs. An unnecessary risk, so we stay put. It’s that behavior that has put the US housing market in a years-long rut.

The Mortgage Bankers Association forecasts rates will average 6.4% in 2026, nowhere near low enough to unlock inventory. Existing-home sales are on track for their third straight year near 30-year lows. For our industry, that means fewer top-to-bottom renovations that come with new ownership. Something has got to give.

MillerKnoll plays it safe, eyes retail expansion.
MillerKnoll reported its latest earnings with revenues slipping 1.6% to $955.2 million, while earnings per share dropped 28.6% to 35 cents. The Michigan-based furniture giant—whose portfolio includes Herman Miller, Knoll, Design Within Reach, and Holly Hunt—continues navigating tariff headwinds.

The company says it expects to fully offset tariff costs in the second half of fiscal 2026 through pricing adjustments. I find it interesting that with 70% of its North American retail cost of goods sourced domestically, MillerKnoll faces less tariff exposure than most competitors.

CEO Andi Owen announced plans to open 14 to 16 new US stores this year, advancing the strategy to double its DWR and Herman Miller footprint over the next several years. I love to see more brick-and-mortar investments—human experiences will set us apart from the AI world.

Carpet makes a comeback.
The New York Times reports that wall-to-wall carpeting is returning to high-end homes, from Alpine ski chalets to Manhattan condos. Unlike the orange nylon shag of the 1970s, today’s haute carpets use silk, mohair, and merino wool and can cost up to $65,000 per room to install, according to Patterson Flynn’s creative director Pam Marshall.

At carpet company Stark, sales are up approximately 20% in the last 18 months, with luxury materials like cashmere leading demand. Designer Adam Charlap Hyman told the Times that carpeting can make a room appear “dipped” in color.

This tracks with what I’ve been saying a lot recently: maximalism is roaring back. After years of minimalist gray, people with taste are demanding texture, color, and drama. Wall-to-wall carpet delivers all three.

I wonder if wall-to-wall carpeting will experience the same boom that wallpaper has been going through for the last 15 years (at least). As a lover of w-2-w myself, I would bet yes. But it won’t be as long as the wallpaper boom because carpet won’t benefit from the DIY wave wallpaper rode. I’m all in on it, especially if it has tons of pattern.

RH Junior adds another showroom.
Arhaus just opened its 16th California showroom at San Diego’s Fashion Valley Mall: a 19,000-square-foot space offering artisan-crafted furniture and complimentary design services. It’s the company’s second San Diego location and part of a portfolio now exceeding 100 showrooms nationwide.

The baby giant keeps fighting for market share with a strategy that’s the polar opposite of RH’s erratic approach. While RH goes massive and monumental, Arhaus stays nimble—more stores, versatile footprints, strong design services embedded in every location. That’s why I call it “RH Junior,” although they probably deserve better.

It will be fun to watch these two battle it out in 2026. Different playbooks, same high-end customer, increasingly overlapping markets. Arhaus is proving there’s more than one way to build a “luxury” furniture empire.

Salone keeps bringing the cash to Milan.
Milan Design Week 2025 generated revenue inflows of 278 million euros for the city, up from 275 million euros in 2024 and 15% higher than 2023, according to a new report. The fair drew 302,000 visitors, with international attendees making up 68% of the crowd, up from 54% the previous year.

Overnight stays rose 11.4% to 412,500, and the average stay increased from 2.81 to 3.03 nights. Milan airports handled a record 1.19 million passengers during the week. Digital spending around the city climbed 18%.

The numbers prove Salone is a powerful economic engine for Milan. The 64th edition runs April 21-26, 2026 at Fiera Milano Rho under the theme “A Matter of Salone.” If you haven’t been, it should be high on your list. Book now—hotels and airfare are already mostly gone. You’ll be among 302,000 design professionals (and Mr Thread readers) witnessing the best of global design.

Designing for the NFL elite.
People magazine just profiled Taylor Bates and Tiffany Compton, founders of Elliot Tate Design, an interior design firm that’s become the go-to for NFL wives and girlfriends. Bates is the daughter of a former player, and Compton the wife of another, so the duo understands the unique demands of football families who need homes designed fast and built for 6’7” athletes with size 15 shoes.

Founded less than two years ago, the firm has already worked with families across the league, including Cleveland Browns offensive lineman Wyatt Teller and Minnesota Vikings center Ryan Kelly. Their speed is legendary: they furnished Ryan Kelly’s entire home in seven weeks after his team switch.

The designers told People they’re in talks to collaborate with Taylor Swift and Travis Kelce on a future home, envisioning “a very refined lounge-y space for Taylor where it’s very artsy, very almost like Art Deco” with dark woods, heavy leathers and moody 1920s Ralph Lauren vibes. Plus a “catio” for Swift’s cats.

This is a masterclass in niche specialization. The most successful designers don’t try to serve everyone—they dominate one corner of the market. As the great business minds all know: Pursue niches to find the riches!

Thanks for reading… a peaceful and blessed holiday to you all!

Mr. Thread