Houzz Inc., a platform for home remodeling and design, released the Q4 2018 Houzz Renovation Barometer, which tracks residential renovation market expectations, project backlogs and recent activity among businesses in the construction sector and the architectural and design services sector. The Barometer points to a strong outlook for the home renovation market in the last quarter of the year.
“Home renovation professionals experienced consistent new business gains and backlogs in the third quarter in both sectors, fueling optimism for the year end,” said Nino Sitchinava, Houzz principal economist. “While market fundamentals, such as high home equity, aging homes and older homeowners staying in place, drive the demand nationally, Southern and Western regions continue to be shaped by recent hurricane and wildfire activity. Overall, rising costs of raw materials and persistent skilled labor shortages create headwinds across all regions and industry sectors.”
Construction Sector
- The Expected Business Activity Indicator related to project inquiries and new projects increased to 79 in Q4 (up six points relative to Q3). The uptick follows from increases in both components, with expectations for project inquiries rising to 79 in Q4 (up eight points), and expectations for new projects increasing to 79 in Q4 (up five points).
- The Backlog Indicator decreased to 4.5 weeks nationally in Q4 (down 2 weeks relative to Q3). Overall backlog for the construction sector is roughly half a week below year-over-year levels.
- The Recent Business Activity Indicator related to project inquiries and new projects, increased to 71 in Q3 (up six points relative to Q2). The uptick follows an increase in both recent project inquiry activity, which increased to 73 in Q3 (up ten points), and recent new project activity, which increased to 69 (up one point).
Architectural and Design Services Sector
- The Expected Business Activity Indicator related to project inquiries and new projects decreased to 64 in Q4 (down five points relative to Q3). Expectations for project inquiries decreased to 63 in Q4 (down five points), and expectations for new projects decreased to 65 in Q4 (down four points).
- The Backlog Indicator for this sector decreased to 5.1 weeks nationally in Q4 (down 0.5 weeks relative to Q3). Overall backlog for the architectural and design services sector is consistent with year-over-year levels.
- The Recent Business Activity Indicator related to project inquiries and new projects increased to 60 in Q3 (up three points relative to Q2). The uptick follows an increase in both recent project inquiry activity, which increased to 62 in Q3 (up three points), and recent new project activity, which increased to 58 (up four points).
