Housing Pros Report Improved Optimism

Despite ongoing affordability and economic challenges continuing to impact the housing market, construction and design professionals are heading into the end of 2025 with cautious optimism. According to the Q-4 2025 U.S. Renovation Barometer from home remodeling and design platform Houzz, stronger business activity is expected in the last quarter of the year, providing pros with a newfound sense of relief following previous quarters of low client demand. 

Project demand is improving for both construction and design-related firms

Houzz’s Expected Business Activity Indicator (EBAI) of new project inquiries and newly committed projects reported by construction firms increased from 58 in Q-3 2025 to 66 in Q-4 2025.

In the architectural and design services sector, however, the EBAI increased by just one point quarter-over-quarter to 59 in Q4. While slight, this is an improvement from declines in the last three quarters. 

While project expectations are improving, project backlogs are shrinking

Although demand is expected to improve in the coming months, a lack of expected business activity over the last several quarters has caused a dcline in project backlogs. At the start of Q-4 2025, the average backlog of projects across the construction sector was 5.4 weeks nationwide, which is down by 5.1 weeks compared with the backlog in Q-4 2024, when it was 10.5 weeks.

Architectural and design services firms are seeing a slight decrease in wait times. The Project Backlog Indicator was at 5.5 weeks at the beginning of Q-4 2025, approximately 0.8 weeks shorter than the average wait time one year ago when it was 6.3 weeks.

How has housing industry sentiment changed over the last several months?

• Housing Pros Weary of Current Economic Conditions: In a Q-3 2025 survey from Houzz, 93% of construction firms and 94% of design firms said they had concerns about the impact economic challenges would have on their businesses. 
• Optimism Among Home Builders Remains Low: A recent survey from the National Association of Home Builders and Wells Fargo shows overall confidence in the single-family market was down in May.