In a report by Houzz, construction professionals signaled stronger expectations for Q4 2025 following a rebound in recent activity, while businesses in the architectural and design services sector remained moderately optimistic despite a modest slowdown.

Houzz reported the Expected Business Activity Indicator for construction rose to 66 for Q4, driven by higher expectations for new committed projects and inquiries. The Recent Business Activity Indicator for construction increased to 55 in Q3. Project backlogs at the start of Q4 averaged 5.4 weeks for construction firms.

Design expectations edged up, with the sector’s Expected Business Activity Indicator at 59 for Q4. The Recent Business Activity Indicator for design decreased to 43 in Q3, and average backlogs at the start of Q4 measured 5.5 weeks. Interior designers were slightly more optimistic than architects.

Looking to 2026, most firms expect homeowner hesitations to center on overall project costs, the economy and job stability, and tariffs. Many businesses plan to adopt or upgrade technology, adjust pricing or contract terms, and increase focus on marketing and client acquisition.

“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 Marine Sargsyan, staff economist at Houzz. “In contrast, design professionals remain more cautious, signaling that while homeowner interest persists, project planning cycles may lengthen as clients weigh broader economic factors heading into 2026.”

Access the full report here.

For related coverage on market dynamics affecting building and finishing demand, see PCI’s Market Reports page.