Houzz Survey Reveals Renovation Pros Have Positive Outlook on 2025

Palo Alto, CA, February 10, 2025-Houzz has released findings from a survey of 1,537 U.S. residential renovation businesses about 2024 and expectations for 2025.

Optimism Prevails for 2025: More than three in five firms in the construction and design sectors have a positive business outlook for 2025, with 60% to 73% reporting having a good or very good outlook. Optimism is most widespread among specialty contractors, with nearly three-quarters (73%) reporting having a good or very good outlook for 2025. Interior designers follow closely, at 70%. Sentiment is also positive among the majority of design-build firms (68%) and general contractors (61%). Architects are the most conservative group again this year, with 60% reporting having a positive outlook and nearly a third (32%) reporting having a neutral outlook.

Construction Firms Anticipate Double-Digit Growth: Both construction and design businesses are anticipating higher revenue growth in 2025 than they anticipated for 2024. Specialty contractors as well as general contractors are expecting double-digit revenue growth in 2025 (average growth of 12.4% and 11.3%, respectively). Architects also expect a high growth rate in 2025 (9.4%), as do design-build firms (9.3%), interior designers (9.0%), and landscaping and outdoor service firms (9.1%). Businesses providing specialty interior services are the only group with lower revenue growth expectations this year (7.1% for 2025 versus 8.2% for 2024). 

Bullish About Demand and the Economy: Aligned with the positive growth outlook, more firms in both the construction and design sectors expect the national economy and their local economies to improve than expect them to worsen. More than half of businesses across all seven groups (51% to 77%) also expect higher demand for services in 2025.

Revenue Declined in 2024 In 2024, businesses across all seven industry groups reported the biggest year-over-year dip in average annual revenue since 2014. Revenue for business providing specialty interior services dropped by 7.2% - the most significant reduction among the seven groups - followed by a decline of 6.5% for landscaping and outdoor service firms. In the construction sector, both design-build firms and specialty contractors reported a 2.8% decline in 2024 revenue compared with the previous year, while general contractors experienced a smaller drop (0.3%). In the design sector, interior designers experienced the largest revenue dip (4.1%), while architects reported a 2.4% decrease. 

Specialized Software Is Widely Used: Businesses across the seven industry groups use software to manage projects and operations, engage clients, automate workflows, facilitate payments and enhance brand visibility. Specifically, 84% of architects, 58% of interior designers, 57% of design-build firms, and 51% of landscaping and outdoor service firms used drafting and rendering software in 2024. Meanwhile, nearly 2 in 5 specialty contractors (37%) and a third of general contractors (33%) relied on software for estimating costs or bids.

Investing in the Business in 2024: Firms across the industry prioritized investments in key areas to enhance operational performance. Increasing efficiency was a top focus, with 40% of architects, 42% of specialty contractors, and 40% of design-build firms dedicating resources to streamline processes and improve productivity. Finally, 20% of architects, 16% of interior designers and 16% of design-build firms focused on maximizing returns on existing technology investments.