PALO ALTO, Calif. — Houzz Inc., an all-in-one software platform for construction and design, has released its Q1 2026 U.S. Houzz Pro Industry Barometer, showing a moderately positive outlook outweighs negative expectations for 2026 in the construction sector, while sentiment among the design services sector is more mixed.
In the construction arena, 56% anticipate a good to very good year, 28% expect business conditions to remain stable and 16% anticipate weaker performance than last year. Meanwhile, half the design group is expecting a good to very good year, with 35% reporting a neutral outlook, and the remaining 15% anticipating poorer business performance in 2026 vs. 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.”
Houzz asked construction and design pros about their outlook for 2026 and expectations across various market conditions. Expectations for 2026 include:
- Improving demand: Nearly two-thirds of design firms expect improved demand in 2026 (62%), compared with 57% of construction firms.
- Mixed economic expectations: More businesses expect local economic conditions to strengthen (38% construction, 43% design) than worsen (29% construction, 26% design), while a larger share of pros anticipate the national economy will slow (43% construction, 51% design) rather than improve (30% construction, 32% design).
- Ongoing labor constraints: More than one-third of construction firms and nearly one-third of design firms expect labor shortages to persist (36% and 30%, respectively).
- Rising costs: A majority of businesses expect product and material costs to increase (69% construction, 65% design).
For the full reports on each sector, click here.
The Q4 2025 Barometer was fielded Dec. 2-22, 2025, and garnered responses from more than 1,100 home improvement firms on Houzz.
