The construction sector showed a continued decline in business sentiment from the second quarter of 2025 into the third quarter, according to the Houzz U.S. Renovation Barometer report.
Findings from the Q3 2025 Houzz Renovation Barometer, which tracks residential renovation market expectations, project backlogs and recent activity among businesses in the construction sector.
The Expected Business Activity Indicator related to project inquiries and new committed projects declined by one point to 58 in the third quarter of 2024, compared with 59 in the second quarter.
This drop is mainly driven by a 9-point decline in expectations for new committed projects in the third quarter.
The Project Backlog Indicator was 6.1 weeks at the beginning of the third quarter of 2025, which is 1.5 weeks shorter than it was in the third quarter of 2024.
Main challenges to business activity included increased prices of products and materials, higher labor costs and difficulty maintaining profit margin, Zillow says.
“Expectations have become increasingly cautious among construction and design professionals as they navigate ongoing economic challenges and reduced business activity," Houzz Staff Economist Marine Sargsyan said in a statement. “That said, stable backlogs and gradual adjustments in response to market conditions indicate some resilience. Most are hopeful for improved momentum through the second half of the year.”
Read the full report here.
