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Houzz’s Q4 2026 U.S. Houzz Pro Industry Barometer says construction activity rebounded in Q3, and construction firms’ expectations for the final quarter reached their highest level since early 2022. Design firms were more cautious, while fuel costs, borrowing expenses and clients’ financial concerns continued to affect projects.
Construction activity rebounded in Q3, and firms entered the final quarter of 2026 with their strongest expectations since early 2022, according to Houzz Inc.’s Q4 U.S. Houzz Pro Industry Barometer. Design businesses were more measured, while fuel costs and clients’ caution about economic conditions and borrowing continued to weigh on the sector.
The report says the construction sector’s Recent Business Activity Indicator rose above 50 in Q3, a threshold indicating that more firms reported activity increases than decreases. The source describes this as a rebound after softer business activity earlier in the year, but does not provide the indicator’s exact reading or the size of the change.
Cost pressures remained widespread. In Q3, 89% of construction firms and about 74% of design firms said fuel costs affected their businesses. Reported responses included higher supplier delivery charges, cited by 53% of construction firms and 42% of design firms; raising prices or adding fuel surcharges, cited by 46% and 31%; and absorbing costs through lower margins, cited by 44% and 24%.
Businesses also reported that client decisions hinged on both project details and finances. A clear, timely estimate or proposal helped clients commit, according to 64% of construction firms and 56% of design firms. Meanwhile, 59% of construction firms and 60% of design firms said clients held back while weighing economic conditions or personal finances. Higher interest rates or borrowing costs were the financing issue firms cited most often.
Costs and Client Decisions Shape Demand
The findings point to a recovery in reported construction activity, but not an end to the pressures facing firms. Fuel expenses are affecting most businesses surveyed, and firms are responding in different ways: passing costs along through prices or surcharges, paying higher delivery charges, or accepting smaller margins. Each response can affect project pricing and profitability.
Client hesitation also matters for the flow of work. Firms said economic or personal finances were the most common reason clients delayed commitment, while borrowing costs were the leading financing concern. The report suggests that estimates and proposals can help move interested clients toward a decision, but it does not establish that clearer proposals overcome affordability concerns or guarantee signed projects.
For contractors, designers and suppliers, the split between improved construction expectations and more measured design sentiment is a reminder that the rebound is not uniform. The survey’s reported figures describe professionals’ experiences and expectations; they do not by themselves establish the direction of broader construction spending or future project volume.
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Q3 Rebound After Softer Activity
The report places the Q3 improvement after a period of softer activity earlier in 2026. Its activity indicator crossing above 50 signals that increases were reported by more surveyed firms than decreases. That measure reflects the balance of reported business activity, rather than a direct tally of construction projects, revenue or employment.
Houzz’s findings also distinguish between construction and design businesses. Construction firms reported a stronger rebound and more upbeat Q4 expectations, while design firms were characterized as cautiously optimistic. The report does not provide enough detail in the supplied material to compare the exact expectation scores or determine how views changed across every quarter.
“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
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Limits of the Survey Findings
The figures provided do not include the exact Q3 indicator reading, the number of respondents, survey dates, or detailed methods. The report therefore supports describing a reported rebound and improved expectations, but not calculating the rebound’s size or treating it as a measure of the entire U.S. construction market.
It is also unclear how fuel prices, interest rates or client finances may change during Q4, and whether the upbeat expectations will translate into completed projects. The survey reports what participating firms said; it does not verify the outlook or forecast actual industry performance.
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Whether Q4 Expectations Hold
The next test is whether the stronger construction outlook is reflected in business activity as Q4 proceeds. Future industry survey results would help show whether the Q3 rebound continued and whether design firms’ cautious optimism strengthened or weakened.
For now, the report identifies the issues firms say are shaping decisions: fuel and delivery costs, clients’ budgets, financing conditions, and the clarity of project proposals. It provides no specific forecast for Q4 activity, and no later results are included in the supplied source material.
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Key Questions
What does the report say happened to construction activity?
Houzz says the Recent Business Activity Indicator rose above 50 in Q3, meaning more construction firms reported increased activity than decreased activity. The supplied report does not give the exact indicator value.
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 described as more measured but cautiously optimistic.
What costs are affecting firms?
Fuel costs were reported as a business impact by 89% of construction firms and about 74% of design firms. Firms cited higher supplier delivery charges, price increases or fuel surcharges, and lower margins as responses.
Why are some clients delaying projects?
Firms most often said clients were weighing economic conditions or personal finances. Higher interest rates or borrowing costs were the financing issue cited most often by both construction and design firms.
Does the survey prove the construction market will keep growing?
No. The report describes surveyed firms’ Q3 activity and Q4 expectations. It does not establish that activity will continue to rise across the entire U.S. market or provide a confirmed forecast of future results.
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