Remodeling professionals expressed tempered hope about their business prospects for the first three months of the year, new data from Houzz shows. Their sentiment is split by industry sector, with design and architecture firms expressing greater optimism than they did at the end of last year, while construction businesses offer less. Given market conditions, that split is understandable.

“Businesses in the home remodeling industry are kicking off the year with cautious optimism,” says Marine Sargsyan, Houzz senior economist. “Favorable interest rates and increased pandemic-related demand for remodeling have given architectural and design firms confidence for Q1 compared with the previous quarter.

“Yet construction businesses have tempered their expectations slightly as they continue to face supply chain constraints, labor shortages and increasing costs for materials, such as lumber.”