This is the first in a series related to Forisk’s Q2 2016 forest industry analysis and timber price forecasts for the United States.

Each quarter when updating our Forisk Research Quarterly (FRQ) forecast models, we revisit prior projections and review applied research on business and economic forecasting. For 2015, Forisk projected final housing starts growth of 11.9% over 2014 versus actual growth of 10.8%. Forisk’s Housing Starts Outlook combines independent forecasts from professionals in the housing industry. Currently, these include Fannie Mae, Freddie Mac, the National Association of Home Builders (NAHB), The Conference Board, and Wells Fargo. Forisk applies long-term assumptions from the U.S. Energy Information Administration (EIA) in establishing the peak and trend over the next ten years (Figure).

Overall, Forisk projects 2016 housing starts of 1.23 million, down 1.9% from 1.25 million as of January 2016. Forisk’s 2016 Base Case peaks at 1.55 million housing starts in 2020 before returning to a long-term trend approaching 1.52 million. For comparison, our October 2015 Base Case peaked at 1.56 million housing starts in 2019.

 

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