Houzz Q4 Barometer Shows Rebound in Construction Confidence as Design Firms Stay Cautious
Key Highlights
- Construction firms' expected business activity indicator increased to 66, driven by more new projects and shorter backlogs
- Design professionals remain cautiously optimistic, with expectations slightly rising to 59 amid ongoing economic concerns
- Backlogs for both sectors have decreased, indicating a faster project turnaround and increased market activity
- Most pros anticipate homeowner concerns about costs and tariffs in 2026, leading to operational adjustments
PALO ALTO, CA — Construction pros are closing out the year on a high note, according to the Q4 2025 Houzz US Renovation Barometer. The quarterly report shows renewed optimism and stronger project pipelines following a surge in Q3 activity, while design professionals remain cautiously positive heading into 2026.
Construction Firms See Uptick in Activity
Houzz reports that the Expected Business Activity Indicator for construction firms rose eight points to 66 for the fourth quarter, driven by an increase in new committed projects. Project inquiries also climbed, while backlogs eased to 5.4 weeks—roughly five weeks shorter than a year ago.
“Construction professionals are closing the year with renewed confidence, supported by a surge in project activity in the third quarter and recent interest rate cuts,” said Houzz Staff Economist Marine Sargsyan.
Design Sector Moderately Optimistic
Architectural and design services firms reported only a slight gain in expectations for Q4, with the indicator inching up to 59. Backlogs averaged 5.5 weeks, down just under a week year over year. While homeowner interest persists, firms report longer project planning cycles as clients weigh broader economic factors.
Pros Adjust for 2026 Market Conditions
Nearly all surveyed pros expect homeowners to enter 2026 with concerns about project costs, tariffs, and overall economic conditions. In response, most firms are adapting their operations—investing in new technology, refining pricing and contract terms, and stepping up marketing efforts to attract and retain clients.
The Houzz US Renovation Barometer tracks quarterly business expectations, project backlogs, and recent activity among construction and design firms nationwide. The Q4 2025 survey included responses from 1,088 professionals fielded between Sept. 18 and Oct. 6, 2025.
To learn more visit www.houzz.com.
Note: this release was rewritten with help from generative AI.