Pros Maintain Optimism Heading Into Q3 Despite Ongoing Pressures

The U.S. Houzz Pro Industry Renovation Barometer tracks expected, current and recent business activity among businesses in the construction sector and the architectural and design services sector. The Q3 2026 Barometer was fielded July 2 through July 8, 2026, and garnered responses from nearly 1,000 firms in the construction and design industry on Houzz.

Here’s what construction and design industry professionals are reporting.

A score higher than 50 indicates that more firms reported an increase in their business expectations than reported a decrease; a score below 50 indicates the opposite.

Construction Firms

1. Expectations improve moderately. The Expected Business Activity Indicator, which is related to project inquiries and new committed projects, increased 3 points to 61 for Q3 2026 (from 58 for Q2 2026). The quarter-over-quarter gain was driven primarily by project inquiries, which rose 4 points to 61 (up from 57 in Q2), while expectations for new committed projects inched up to 60.

Trends diverge considerably across pro types. Build-only remodelers report a strong rebound, with their indicator jumping 9 points to 59 (from 50 in Q2), supported by healthy increases in both inquiries (59) and committed projects (58). Conversely, design-build remodelers declined 3 points to 63 (from 66 in Q2), weighed down by a softer outlook for new committed projects (61), even though their inquiry expectations essentially held steady at 64, inching down from 65 in Q2.

The indicator is based on survey questions about whether businesses expect the number of project inquiries and new committed projects to increase, decrease or remain unchanged in the coming three months compared with the previous three months.

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2. Project backlogs hold steady year over year. The Project Backlog Indicator, which measures the average wait time before firms can begin a new project, clocked in at 6.1 weeks nationally at the start of Q3 2026 — unchanged from the 6.1-week average reported a year earlier, signaling stable pipelines across the industry overall.

Wait times for build-only remodelers decreased slightly to 6.0 weeks (down 0.4 weeks from 6.4 weeks in Q3 2025). This was offset by design-build remodelers, who reported a 0.4-week increase to 6.2 weeks (up from 5.8 weeks in Q3 2025).

With design-build firms now holding just a nominal edge over build-only remodelers (6.2 weeks versus 6.0 weeks), backlog timelines have effectively converged across the construction sector. The broader trend suggests that pipelines remain steady, with build-only remodelers easing modestly while design-build firms see a slight lengthening in timelines.

The Project Backlog Indicator is based on survey questions that ask businesses to report wait times (in weeks) to start work on a midsize project. Scores are computed as average wait times without seasonal adjustment.

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A score higher than 50 indicates that more firms reported an increase in their recent business activity than reported a decrease; a score below 50 indicates the opposite.

3. Recent activity dips slightly under baseline. The Recent Business Activity Indicator fell slightly to 47 in Q2 2026 (from 48 in Q1 2026), remaining just below the 50-point threshold, which indicates that slightly more firms observed contractions than improvements in activity. Project inquiries edged down 1 point to 50, while new committed projects held flat at 45.

Results again vary by firm type. Build-only remodelers posted a recent activity reading of 47 (down from 50 in Q1), seeing incoming inquiries soften to 48 even as signed projects ticked up to 47. Design-build remodelers saw the opposite, reporting an indicator of 47 (up from 46 in Q1) as a healthy lift in inquiries (52) was offset by a lower conversion into committed projects (43).

The Recent Business Activity Indicator looks at actual activity over the previous three months. In contrast with the Expected Business Activity and Project Backlog indicators, which look forward in time, the Recent Business Activity Indicator looks back. It’s based on survey questions about whether businesses observed an increase, a decrease or no change in the actual number of project inquiries and new committed projects over the previous three months relative to the three months prior.

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A score higher than 50 indicates that more firms reported an increase in their business expectations than reported a decrease; a score below 50 indicates the opposite.

Architectural and Design Firms

1. Expectations rally across the sector. The Expected Business Activity Indicator for architectural and design services firms jumped 8 points to 68 for Q3 2026 (up from 60 in Q2), signaling a robust, broad-based surge in forward-looking confidence. Expectations for new committed projects climbed to 69 (up 8 points) and project inquiries rose to 67 (up 7 points).

Architects drove the primary momentum across the sector, seeing a dramatic 13-point increase to 71 (up from 58 in Q2), showing double-digit gains across both inquiries and committed projects. Interior designers experienced a minor 2-point pullback to 63 (from 65 in Q2), reflecting a mild cooling from a highly resilient previous quarter.

Because the index sits well north of the 50-point line, it indicates a consensus that industry professionals expect business conditions to keep improving.

2. Backlogs experience a year-over-year decline. The Project Backlog Indicator dropped to 4.7 weeks at the start of Q3 2026, a decline of 1.2 weeks from the 5.9-week average recorded during the same period in 2025, pointing toward accelerated timelines and shorter pipelines across the sector.

Backlog levels have now diverged across the groups. Architects saw a substantial contraction, with backlogs shortening by 1.6 weeks to 5.1 weeks (down from 6.7 weeks in Q3 2025). Interior designers also reported a modest reduction, with wait times easing to 3.9 weeks (from 4.4 weeks last year). Unlike the construction sector, backlog trends in design have spread apart, with architects continuing to maintain noticeably longer wait times than interior designers.

The Project Backlog Indicator is based on survey questions that ask businesses to report wait times (in weeks) to start work on a midsize project. Scores are computed as average wait times without seasonal adjustment.

A score higher than 50 indicates that more firms reported an increase in their recent business activity than reported a decrease; a score below 50 indicates the opposite.

3. Recent business activity experiences a sharp rebound. The Recent Business Activity Indicator came roaring back, climbing to 62 in Q2 2026 from a soft 48 in Q1. This massive turnaround indicates that significantly more firms experienced expansion rather than contraction, fueled by a 17-point surge in project inquiries (to 62) and an 11-point gain in new committed projects (to 63).

Widespread gains were reported across pro types, though both moved higher. Architects led the charge, with their recent activity reading skyrocketing to 67 (up from 45 in Q1), powered by a dramatic jump in inquiries to 68 and new committed projects to 66. Interior designers also logged solid improvements, with their indicator rising to 55 (up from 53 in Q1) on steady committed project growth (58) and 52 (up 1 point) on project inquiries.

Overall, actual near-term demand and client sign-offs strengthened dramatically across the design sector during the second quarter, with architects posting a sharp rebound and interior designers seeing more modest, steady gains.