PALO ALTO, CA — Shorter backlogs, comparable to pre-pandemic levels, are likely fueling a rise in new project commitments as 2024 gets underway amidst “glimpses of optimism,” according to the Q1 2024 “Houzz U.S. Renovation Barometer,” a quarterly gauge of activity in the new construction and architectural/design services sectors of the housing market.
“Glimpses of optimism are emerging in the construction and design industry, with some easing of interest rates and businesses reporting slight improvements in quarterly activity at the end of the year, compared with earlier periods in 2023,” said Marine Sargsyan, staff economist for Houzz, the Palo Alto, CA-based online platform for home remodeling and design.
“Despite persisting labor shortages, industry professionals have adapted – sustaining operations and fulfilling project demands by refining project scope and upskilling their team members,” Sargsyan observed.
According to Houzz – whose Q1 Barometer was fielded from Dec. 23, 2023 through Jan. 3, 2024 – backlogs across both the construction and architectural/design services sectors are shorter than a year ago. In the construction sector, backlogs are currently at 6.7 weeks, 1.6 weeks shorter than the same period last year, and matching the level from five years ago.
In a similar trend, the architectural and design services sector has seen a marginal reduction in wait times to 5.2 weeks, slightly less than last year’s 5.3 weeks, and just 0.5 weeks longer than the pre-pandemic period in Q1 2019, which stood at 4.7 weeks, Houzz said.
The overall outlook in the construction sector is favorable, with both build-only and design-build remodelers anticipating growth in the first quarter, Houzz said, noting that this follows a year and a half in which more businesses reported activity decline than growth. The positive sentiment among the architectural and design services sector is stronger in Q1 2024 than the previous quarter, as more firms expect business activity to improve than those expecting slowdowns, Houzz added.