Remodeling activity is strong and is likely to continue that way for the rest of the year. Although somewhat uneven across sectors, the industry on the whole experienced positive growth in the third quarter, and demand for services remains high.

As yet unknown is how recovery from Hurricanes Harvey and Irma and the wildfires in the western states will impact the industry, which was already under pressure from materials and labor shortages prior to the recent disasters.

After peaking in the first quarter, remodeling activity weakened in early spring but has been fairly steady in recent months, as demand has grown along with the substantial increase in home values in many parts of the country.

Earlier this week, Houzz announced the results of its U.S. Renovation Barometer for the third quarter, reflecting "high quarter-over-quarter confidence for all industry sectors," with more firms reporting an increase in remodeling activity than in the second quarter. The study also shows a slight quarterly increase in project backlogs, of between five to eight weeks on average, indicating most firms will remain busy through the fourth quarter as well.

As to be expected, landscape and specialty outdoor contractors as well as builders and renovators experienced the largest quarter-over-quarter increases during the summer months. These are also the firms that anticipate the largest decrease in demand during the late fall and early winter.

Remodelers and general contractors reported slightly lower quarter-over-quarter gains, but these sectors have performed consistently well throughout the year. Activity among designers and architects was positive but stayed more or less flat from one quarter to the next.

Designers, however, showed strong optimism for growth in the fourth quarter, anticipating a rise in inquiries, number of projects and the size of projects. Designers on average reported backlogs of around four and a half weeks.

In its news release, Houzz observed that year-over-year scores for architects increased in the third quarter and reached their highest level since the second quarter of 2016. This finding corresponds with the results of the American Institute of Architects Home Design Trends Survey for the second quarter.

AIA chief economist Kermit Baker noted that although residential billings and inquiries were down somewhat overall from the first quarter of 2017, "activity in the additions and remodeling segments are picking up." Similarly, the American Society of Interior Designers reported that its Interior Design Billings Index rose three points in August, following a positive second quarter, with the residential single-family and multifamily sectors having "shown trending gains since December."

According to the National Association of Realtors' recently released "2017 Remodeling Impact Report," kitchen renovations and upgrades, bathroom renovations and upgrades, and bathroom additions continue to be the most commonly requested remodeling projects. The study finds these projects result in the highest level of client satisfaction and return on investment when selling a home.

In addition, the AIA survey found a growing number of homeowners requesting aging-in-place and/or multigenerational enhancements, along with whole-house technology integration and design to conserve energy and water.

While enjoying increased demand, remodelers — like the rest of the housing industry — are having to cope with labor and materials shortages that are creating delays and driving up prices. Recovery and rebuilding efforts following the devastation caused by the recent hurricanes and wildfires will increase pressure on firms already stretched thin.

At the same time, the industry will likely benefit from sustained demand for its services for several years to come, although managing expectations will be a challenge. Meanwhile, remodelers appear to have plenty to keep them busy and can look forward to positive growth at the end of the year.