Since 2015, Houzz, the leading platform for home remodeling and design, has been tracking residential renovation market expectations, project backlogs and recent activity among businesses in the construction sector and architectural and design services sector through its Renovation Barometer. The most recent data shows continued confidence for home renovation activity going into the third quarter of 2021.
The Expected Business Activity Indicator portion of the Houzz Renovation Barometer is based on survey questions that ask businesses to report whether they expect the number of project inquiries and new committed projects to increase, decrease or stay unchanged in the upcoming quarter relative to the prior quarter. Scores for each component are then computed as a seasonally adjusted diffusion indices on a scale of 0 to 100, with index values over 50 indicating that a greater proportion of firms reported quarter-over-quarter increases than those reporting decreases.
The Q3 Renovation Barometer showed an increase in project inquiries and new committed projects, moving to 76 compared to 73 in the second quarter. More specifically, project inquiries increased from 75 to 79 and new committed projects increased from 70 to 73 from Q2 to Q3. The Project Backlog Indicator jumped to 10.8 weeks, nearly a month longer than the same time one year ago, which was at 6.2 weeks.
“The residential construction and design industry has continued to thrive under strong demand. In fact, our Expected Business Activity indicators are at some of the highest levels we’ve seen across both sectors since we began tracking the Barometer,” says Marine Sargsyan, Houzz senior economist. “Heightened activity is not without its challenges. Supply chain delays, extreme weather patterns, rising product and material costs and labor shortages create major headwinds for the industry. That said, favorable conditions prevail and professionals are confident about business performance through the end of the year.”