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Home Construction & Design Pros Feel Q2 Confidence

Residential construction and design businesses are reporting confidence for home renovation activity in the second quarter of the year, according to online design platform Houzz. The company’s second-quarter Houzz Barometer tracks residential renovation market expectations, project backlogs and recent activity to gauge pro sentiment.

“The Barometer points to strong market conditions, diminishing the uncertainty experienced by residential remodeling and design businesses just one year ago,” says Marine Sargsyan, Houzz senior economist. “Following a busy first quarter, businesses are faced with soaring homeowner demand along with lengthy permitting timelines, supply chain constraints and unrelenting labor shortages. These constraints likely contribute to industrywide wait times of more than two months before a business can begin a new project.”

Specifically, Houzz’s analysis of second-quarter construction sector sentiments reveals an increase in business activity related to project inquiries and new committed projects. That metric rose more than 4.2 percent since the first quarter. Pro construction crews’ expectations for project inquiries grew significantly from the first quarter, and new committed projects rose slightly.

Project backlogs are becoming an increasing industry concern, Houzz’s data shows. The company’s estimation for project delays grew to 9.3 weeks in the second quarter, nearly a month longer than the same period in 2020. These wait times represent the highest level reported for professional construction crews since July 2018.

Architectural and design services professionals also see reasons for confidence on the horizon, Houzz reports. The company’s Expected Business Activity Indicator for architects and design pros grew to 74 basis points in the second quarter, up from 68 in the first quarter. Expectations for project inquiries also rose sharply, roughly 13 percent higher than in the previous quarter.

Architects and design firms are also reporting project delays. On average, this field sees delays of 8.4 weeks in the second quarter, representing the highest reported level of backlogs since Houzz’s Barometer began tracking this information in July 2017.

COVID-19 continues to play an enormous role in the channel, Houzz’s research confirms. Roughly 33 percent of architectural and design businesses and construction pros have steadily adopted online invoicing and payments to streamline business and ensure safety.

“The pandemic accelerated the adoption of online tools like our Houzz Pro business management and marketing software, which offers remote collaboration solutions such as video meetings, online invoicing and electronic payments, to help residential design and construction firms connect with customers and move projects forward safely and easily,” says Liza Hausman, Houzz vice president of industry marketing. “As renovation project demand surges, businesses are turning to software to help them better manage both the influx of new project inquiries and the resulting projects.”

The Houzz Renovation Barometer is based on a quarterly online survey sent to a national panel of businesses with an online profile on Houzz. The Barometer keeps a pulse on home renovation market conditions via three distinct indices that track expected, current and recent business activity in two related industry sectors, the construction sector and the architectural and design services sector.

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