Residential construction and design professionals have an optimistic outlook for 2025, with more than 3 in 5 firms reporting positive expectations for overall business performance, according to the just-released 2025 U.S. Houzz State of the Industry report. Businesses across industry sectors anticipate high revenue growth rates, heightened demand for their services and improved local and national economies, even as they brace for rising costs and worsening labor shortages. This widespread optimism follows a year marked by unexpected revenue and profitability declines industrywide.

“Home professionals are entering 2025 with renewed confidence and expectations for growth in both revenue and profitability after navigating two difficult years,” Houzz staff economist Marine Sargsyan says. “Pros report that they’ve implemented new processes for operational efficiency and client communication and made strategic investments in technology to address the challenges they faced last year. This will better position them for an anticipated increase in demand, enhance their resilience amidst potential tariffs and leverage expected improvements in both local and national economic conditions.”

Here’s what the report reveals about firms’ expectations for 2025 and performances in 2024.