Home Professionals Are Optimistic After a Strong Finish to 2024
Home Professionals Are Optimistic After a Strong Finish to 2024
Business activity and expectations increased across the industry, the Q1 2025 Houzz Renovation Barometer shows
Business activity and expectations increased across the industry, the Q1 2025 Houzz Renovation Barometer shows
Construction and design professionals kicked off 2025 feeling bullish, with more companies in both industry groups anticipating increases rather than decreases in first-quarter business activity. That optimism follows improved Q4 2024 business activity compared with Q3. Meanwhile, year-over-year, average wait times are slightly shorter among construction firms and longer among architecture and design firms.
Those are key findings in the just-released Q1 2025 Houzz Renovation Barometer, which provides timely insights into the residential renovation industry, including expectations, project backlogs and recent activity among businesses in the construction sector and the architectural and design services sector.
“Strong Q4 performance and recent federal interest rate cuts have bolstered confidence among industry professionals as we enter the new year,” Houzz staff economist Marine Sargsyan says. “With this solid foundation, construction firms are expressing the most positive sentiment we’ve seen for the sector in 2½ years. Confidence levels also remain high among architects and interior designers as new committed projects continue to reinforce demand expectations, though optimism among this sector has softened slightly.”
The Houzz Renovation Barometer tracks expected, current and recent business activity among businesses in the construction sector and the architectural and design services sector. The Q1 2025 survey was fielded from Dec. 16, 2024, to Jan. 11, 2025, and garnered responses from more than 1,000 home improvement firms on Houzz.
Here’s what remodeling and design industry professionals are saying about current residential renovation market conditions.
Construction Firms
1. Business activity outlook increased. The Expected Business Activity Indicator, related to project inquiries and new committed projects, increased 3 points, to 65, for the first quarter of 2025, from 62 for Q4 2024. This means more construction firms anticipate quarter-over-quarter growth than anticipate a decline.
Expectations for project inquiries increased 10 points, to 69 (from 59 for Q4), and expectations for new committed projects declined 2 points, to 62 (from 64 for Q4).
Both build-only and design-build firms are more optimistic for Q1 than they were for the previous quarter. The expected activity indicator for build-only firms increased 3 points, to 65 (from 62 for Q4), and for design-build firms it increased 5 points, to 66 (from 61 for Q4).
The indicator is based on survey questions about whether businesses expect the number of project inquiries and new projects to increase, decrease or remain unchanged in the coming three months compared with the previous three months.
