Interior designers are entering 2025 with both promise and pressure. While consumer confidence and employment show moderate resilience, the broader economic terrain is defined by high interest rates, tariffs, labor shortages, and uncertainty in construction activity. For those working in the residential sector—including closet and storage specialists—these trends are reshaping how and where clients are investing in their homes.

To help design professionals navigate these conditions, the American Society of Interior Designers (ASID) has released its 2025 Economic Outlook Report. The second installment in its annual Outlook series, the report provides a detailed analysis of macroeconomic shifts and their implications for interior design services. It highlights not only the risks at play but also emerging opportunities in areas like adaptive reuse, build-to-rent housing, and aging-in-place design.

As of mid-2025, the design industry is operating in an environment marked by inflationary pressure, constrained labor, and cautious capital spending. Construction activity is slowing, especially in sectors like healthcare and hospitality, where federal funding has paused or declined. Meanwhile, tariffs and global trade disruptions have increased material costs, making transparency and sourcing flexibility even more critical.

For designers focused on closets, storage, and other high-function spaces, this means balancing client expectations with cost-conscious solutions—and staying ahead of supply chain variability. The report notes that designers who understand how economic forces intersect with material availability, labor access, and shifting consumer priorities will be best positioned to guide clients through evolving project scopes.

Residential design: Mixed signals and new niches
While high home prices and elevated interest rates have curbed demand for new single-family construction, the report identifies notable strength in other residential categories. Build-to-rent housing and senior living communities are seeing sustained growth, creating new opportunities for designers who can deliver space-efficient, wellness-oriented, and accessible storage solutions.

Additionally, the adaptive reuse of existing structures—such as converting underutilized offices or hotels into multifamily housing—offers unique design challenges that require creativity in layout, modularity, and space planning. As homes take on hybrid roles (from office to gym to sanctuary), designers are rethinking closets, pantries, and mudrooms not as secondary zones but as highly customized environments with personalized functions.

Where the opportunity lies
Among the key insights relevant to the closet and organization sector: Renovation over new build: With new construction cooling, renovations are gaining ground. Clients are increasingly looking to improve what they already own; Longevity and accessibility: The aging-in-place market continues to grow, and smart closet design is central to this. Features like pull-down rods, lighting integration, and barrier-free access align with broader trends in adaptive living; Smart, sustainable systems: As material costs rise, so does interest in sustainable alternatives such as upcycled millwork, modular cabinetry, and technology-integrated storage; and Retail and hospitality reuse: While new retail construction is limited, opportunities persist in adaptive reuse—such as mall-to-mixed-use conversions and restaurant redesigns.

Despite ongoing headwinds, ASID’s 2025 forecast does not predict a full recession. Instead, it paints a picture of slow, uneven growth, where agility, insight, and innovation will separate thriving firms from struggling ones. For those who design the most intimate spaces in the home—from walk-in closets to custom-built-ins—there is a clear opportunity to lead the conversation around function, flexibility, and personalized design.

The full report is available to ASID members at no cost and to the public for $150 at asid.org.