Furniture World News Desk on
1/26/2026
PALO ALTO, Calif. – Houzz Inc. released its Q1 2026 U.S. Houzz Pro Industry Barometer, reporting a cautious but steady outlook across construction and design sectors. The survey found that 56% of construction firms anticipate a good to very good year, 28% expect stable conditions, and 16% foresee weaker performance than in 2025. Among design firms, 50% expect a good to very good year, 35% anticipate stability, and 15% project declines.
Expectations entering the first quarter of 2026 are lower for construction firms, with an activity indicator of 55, following a decline from Q4 2025. Design firms report stronger optimism, with an index of 61, reflecting gains in business activity at the end of 2025.
“Construction and design businesses are heading into 2026 with a measured but resilient outlook,” said Marine Sargsyan, head of economic research at Houzz. “While expectations for the broader national economy remain subdued and cost and labor pressures persist, many firms anticipate stable demand for their projects. To drive revenue growth in 2026, businesses are adjusting their strategies by raising prices, prioritizing larger and higher-value projects, and investing in employee productivity, reflecting broader industry interest around AI-enabled software tools such as Houzz Pro.”
2026 Outlook:
- Improving demand: 62% of design firms and 57% of construction firms expect demand to rise.
- Mixed economic expectations: 38% of construction firms and 43% of design firms expect local economic improvement, while most foresee slower national economic conditions.
- Ongoing labor constraints: 36% of construction and 30% of design firms anticipate labor shortages to continue.
- Rising costs: 69% of construction and 65% of design firms expect product and material cost increases.
Top strategies for revenue growth in 2026:
- Pursuing larger-budget projects (71% construction, 64% design).
- Increasing markup or margins (45% construction, 50% design).
- Improving employee productivity (32% construction, 30% design).
Q1 2026 Construction Sector Barometer
The Expected Business Activity Indicator for construction firms declined to 55 for Q1 2026, down from 66 in the previous quarter. Project inquiries fell 10 points to 57, and new committed projects dropped 11 points to 53. Build-only remodelers and design-build firms each report an indicator of about 55, down from Q4 2025. The Project Backlog Indicator remains stable year-over-year at 6.1 weeks.
Recent business activity declined slightly in Q4 2025, driven by fewer project inquiries but partially offset by a small rise in new committed projects. Build-only remodelers reported a business indicator of 59, while design-build remodelers reported 43.
Q1 2026 Architectural and Design Services Sector Barometer
Design firms report an increase in expected business activity, with the indicator rising to 61 for Q1 2026. Expectations for project inquiries grew four points, while new committed projects remained steady at 60. The Project Backlog Indicator for design firms stands at 4.5 weeks, a decrease of 2.8 weeks compared with the previous year, mainly due to shorter backlogs among architects. Interior designers’ backlogs were consistent year-over-year at 4.5 weeks.
Recent business activity among design firms improved significantly in Q4 2025, rising to 54 from 43 in the prior quarter. Both project inquiries and new committed projects increased 11 points. Architects reported the largest improvement, with an activity indicator of 55, followed by interior designers at 50.
The quarterly U.S. Houzz Pro Industry Barometer provides data on expectations, backlogs, and recent activity in the residential construction and design industries. Scores above 50 indicate more firms reporting quarter-over-quarter increases than decreases. The Q4 2025 Barometer surveyed 1,174 U.S. home improvement firms between December 2 and December 22, 2025.
Houzz Pro is an all-in-one project management and design platform offering CRM, estimates, takeoffs, and client collaboration tools. The Houzz community includes more than 3 million construction and design professionals across architecture, interior design, general contracting, and design-build firms.
About Houzz
Houzz, the leading platform for construction and design, empowers industry professionals and homeowners with the tools they need to make every project a success. The company’s cloud-based, AI-powered project management and design software, Houzz Pro (pro.houzz.com), helps pros win projects, collaborate with clients and teams, and run their businesses efficiently and profitably. Houzz Pro also provides pros and their clients with 24/7 access to project information, 3D visualizations and financial tools. Using Houzz, people can find ideas and inspiration, hire professionals and buy products. The Houzz platform is used by more than 3 million construction and design industry professionals and over 70 million homeowners and home design enthusiasts around the world. Houzz and Houzz Pro are available on the web and as top-rated mobile apps. For more information, visit www.houzz.com.
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