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Houzz’s Q4 2026 U.S. Houzz Pro Industry Barometer reports that construction business activity rebounded in Q3, and construction firms’ expectations for the final quarter reached their highest level since early 2022. Design firms were more cautious. Fuel costs, borrowing expenses and clients’ financial uncertainty continue to affect project decisions.
Construction activity rebounded in Q3 and firms are entering Q4 2026 with stronger expectations, according to Houzz Inc.’s U.S. Houzz Pro Industry Barometer. The report says the construction sector’s Recent Business Activity Indicator rose above the 50-point threshold, meaning more firms reported increased activity than decreased activity; however, fuel costs and clients’ caution about economic conditions and borrowing continue to weigh on businesses.
The barometer describes a recovery from softer business activity earlier in the year. Construction professionals’ expectations for Q4 reached their highest level since early 2022, according to the report. Design firms were also cautiously optimistic, but their outlook was more measured than construction firms’. The supplied report does not provide the indicator’s precise score or the share of firms expecting activity to rise.
Cost pressure was widespread in Q3: 89% of construction firms and about 74% of design firms said fuel costs affected their businesses. Among construction firms, 53% reported higher supplier delivery charges, 46% raised prices or added fuel surcharges to bids, and 44% absorbed the added expense through lower profit margins. The corresponding figures for design firms were 42%, 31% and 24%. These responses describe different ways firms handled fuel expenses; the source does not say they were mutually exclusive.
Firms also described what helped clients move ahead. A fast, clear estimate or proposal was cited by 64% of construction firms and 56% of design firms. Clients’ decisions were also influenced by settling project scope or budgets and reviewing a firm’s references, reviews or past work. For design firms, 35% said visuals of a proposed project helped clients commit. These are survey responses, not evidence that any single factor guarantees a signed project.
Fuel Costs Shape Project Decisions
The report points to a recovery in construction activity, but it does not describe a return to easy conditions. Firms say fuel expenses affect operating costs, pricing and margins, while client hesitation can delay the conversion of inquiries into contracts. Passing costs to customers may protect margins, but it can also add to the total price clients weigh before proceeding.
Borrowing costs are another constraint. Firms most often cited higher interest rates or borrowing costs as a financing issue affecting clients: 56% of construction firms and 43% of design firms reported it. Another 40% of construction firms and 41% of design firms said clients were waiting for funds to become available. The figures show pressures reported by professionals, not the share of all clients unable to finance work.
For homeowners and other customers, the findings suggest project timing and scope remain sensitive to budgets and financing. For contractors and designers, a clear proposal and documented track record were among the factors firms said helped clients commit. The survey does not measure the effectiveness of those practices or forecast how long current optimism will last.
From Slower Activity to Rebound
The Q4 barometer combines retrospective reports about Q3 business activity with expectations for the final quarter. Its activity indicator uses the 50-point mark as a dividing line: a reading above it indicates that more firms reported increases in activity than decreases. Houzz’s supplied summary says the construction indicator crossed that line after a period of softer activity earlier in 2026, but does not give the exact reading or detail how the design indicator performed.
The report also identifies several points where client decisions can stall. Firms said clients most often held back while weighing economic conditions or personal finances: 59% of construction firms and 60% of design firms cited this. Comparing competing bids was reported by 41% of construction firms and 27% of design firms, while finalizing scope or budget was cited by 24% in each sector. Those responses help explain why a stronger industry outlook can coexist with careful project decisions.
“Construction pros are closing out 2026 with optimism, as expectations reach their highest level since early 2022 following a rebound from a long stretch of slow activity. Design firms are more measured, though cautiously optimistic.”
— Marine Sargsyan, head of economic research at Houzz
The Rebound’s Scale Remains Unspecified
The supplied report summary does not state the exact Q3 indicator reading, the sample size, the survey dates or the percentage of firms expecting growth in Q4. It therefore does not establish how large the rebound was across the industry or whether the stronger outlook will translate into completed projects. The summary also does not provide a direct measure of revenue, hiring or project volume.
Survey responses describe firms’ reported experiences and views; they do not establish that fuel costs or borrowing rates caused a particular project to be delayed or canceled. It is also unclear from the summary how conditions differ by region, firm size or type of construction and design work. The outlook remains a reported expectation, not a confirmed result for Q4.
Q4 Results Will Test Expectations
The next test is whether the optimistic construction outlook is borne out in Q4 business activity. The supplied material reports expectations for the quarter, not its final results. A later barometer or update would show whether activity remained above the threshold and whether firms continued to report more increases than decreases.
Until then, the reported measures offer a snapshot rather than a forecast of completed work. Fuel expenses, clients’ financing access and their willingness to commit remain issues raised by firms in the survey. The source does not specify a publication date for the next report.
Key Questions
What did Houzz report about construction activity?
Houzz’s Q4 2026 U.S. Houzz Pro Industry Barometer says construction’s Recent Business Activity Indicator rose above 50 in Q3. Under the report’s measure, that means more firms reported increased activity than decreased activity.
How optimistic are construction and design firms about Q4?
Construction firms’ expectations reached their highest level since early 2022, according to Houzz. Design firms were cautiously optimistic but more measured. The supplied summary does not give the exact expectation scores.
How are fuel costs affecting firms?
Fuel costs affected 89% of construction firms and about 74% of design firms, the report says. Firms reported higher supplier delivery charges, price increases or fuel surcharges, and absorbing costs through lower margins.
What is holding clients back from projects?
Firms most often said clients were weighing economic conditions or their personal finances. They also cited comparing bids, settling project scope or budgets, and financing concerns such as higher borrowing costs.
Source: rss
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