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The Q4 2026 U.S. Houzz Pro Industry Barometer reports a Q3 rebound in construction activity, with more firms reporting increases than decreases and construction expectations at their highest level since early 2022. Fuel costs, borrowing costs and clients’ financial caution continue to weigh on construction and design businesses.
Construction firms reported a rebound in Q3 and are entering the final quarter of 2026 with improved expectations, according to Houzz Inc.’s Q4 2026 U.S. Houzz Pro Industry Barometer. The report says the construction Recent Business Activity Indicator rose above 50, meaning more firms reported increased activity than decreased activity, while cost pressures and cautious clients remain challenges for both construction and design businesses.
The barometer describes a recovery in construction business activity after a softer stretch earlier in the year. It also says construction professionals’ expectations for the coming quarter reached their highest level since early 2022. Design firms were more measured, although the report characterizes their outlook as cautiously optimistic. The source material does not provide the indicator’s exact score or the survey’s sample size.
Fuel expenses affected 89% of construction firms and about 74% of design firms in Q3, according to the report. The costs showed up in several ways: higher supplier delivery charges were reported by 53% of construction firms and 42% of design firms; 46% and 31%, respectively, raised prices or added fuel surcharges; and 44% and 24% absorbed costs through lower profit margins.
Firms also described what helps clients decide to proceed. The speed and clarity of an estimate or proposal was cited by 64% of construction firms and 56% of design firms. Clients’ completion of project scope or budget work and reviews of a firm’s references or past projects were other reported factors. For design firms, 35% said project visuals helped clients move forward.
Fuel Costs Meet Client Caution
The findings point to a recovery in activity, but not to an end to the financial pressures shaping projects. Firms are contending with fuel expenses that can raise delivery costs, push up bids or reduce margins. How businesses handle those expenses may affect both their profitability and the price clients face.
Client hesitation is another constraint. Firms most often said potential clients held back while considering economic conditions or their personal finances: 59% of construction firms and 60% of design firms cited this. Higher borrowing costs were also commonly reported as affecting clients. Together, those issues can delay decisions even when a firm has inquiries or a proposal in progress.
The survey suggests that clear estimates and a track record may help businesses convert interest into signed projects, but it does not establish that these steps cause a client to commit. The reported figures describe firms’ answers about factors influencing decisions, not a measured change in conversion rates or revenue.
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How Firms Win Project Commitments
The Q4 barometer reflects a mixed picture across the two sectors: construction activity improved in Q3, while design businesses were described as more cautious. Houzz’s head of economic research, Marine Sargsyan, said construction expectations had strengthened after a long period of slow activity. The report’s outlook is based on surveyed industry professionals; the source material provided here does not include detailed methodology or the dates when responses were collected.
On the client side, firms reported that people often delayed commitment while comparing bids or finalizing project plans. Comparing quotes was cited by 41% of construction firms and 27% of design firms; finalizing scope or budget was cited by 24% in each group. Financing difficulties were also part of the picture: firms most often cited higher interest rates or borrowing costs, followed by clients waiting for funds to become available.
“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
Limits of the Q4 Outlook
The report points to stronger construction expectations, but the information provided does not include the barometer’s exact expectation score, the number of participating firms, the survey field dates or the margin of error. It also does not state whether the activity rebound continued after Q3. The indicator crossing 50 signals that more firms reported increases than decreases; it does not by itself quantify the size of the rebound.
The survey records firms’ reports of costs and client behavior, rather than audited financial results or client responses. It is not clear from the supplied material how the reported pressures varied by region, business size or project type, or whether firms’ expectations for Q4 will be borne out.
Whether Momentum Holds in Q4
The next test is whether construction firms’ improved expectations translate into sustained activity and signed projects during Q4. The report identifies fuel costs, borrowing expenses and client caution as continuing constraints, but the supplied material does not give a forecast for revenue, hiring or project volume.
Further barometer results or later industry data would show whether the Q3 rebound persisted and whether design firms’ more measured outlook changed. For now, the survey offers a snapshot of firms’ reported conditions and expectations, not a guarantee of year-end performance.
Key Questions
What did Houzz report about construction activity?
The Q4 2026 U.S. Houzz Pro Industry Barometer says construction activity rebounded in Q3, with its Recent Business Activity Indicator rising above 50. That means more firms reported increased activity than decreased activity.
How did design firms’ outlook compare with construction firms’?
Houzz described design firms as more measured but cautiously optimistic. The report said construction expectations reached their highest level since early 2022; the supplied material does not give a comparable design-sector score.
What pressures did firms report?
Fuel costs affected 89% of construction firms and about 74% of design firms. Businesses reported higher supplier delivery charges, price increases or fuel surcharges, and reduced margins. Firms also said clients faced economic and financing concerns.
What helps clients commit to projects?
Firms most often cited the speed and clarity of estimates or proposals. Reviews, references, past work and completed project budgets were also reported as factors. These are survey responses from firms, not proof that any one factor guarantees a signed project.
Does the report confirm that the rebound will continue?
No. It reports Q3 activity and firms’ expectations for Q4, but the supplied information does not show whether the outlook was realized or provide the survey’s detailed methodology. Q4 performance remains uncertain.
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