This is the fourth in a series related to Forisk’s Q4 2016 forest industry analysis and timber price forecasts for North America.
Forisk projects housing starts of 1.17 million for 2016, which represents a 5.3% increase over 2015 actuals. However, manufactured homes, commonly referred to as mobile homes, represent an end-use for lumber and structural panels that are not captured in new residential construction statistics released by the Department of Commerce. These prefabricated homes are mostly assembled in factories and, per Federal Regulations, are required to be at least 320 square feet in size.
Manufactured homes, which averaged approximately 7% of total housing starts over the last 10 years, accounted for 1% of total lumber and 3% of total OSB (oriented strand board) consumption in 2015, in addition to consuming other wood products such as non-structural panels. Though increasing from 2009 lows, manufactured home shipments remain depressed. Manufactured home shipments are on pace to increase 11.5% in 2016, with an estimated 58.9 thousand shipments through Q3, while shipments averaged 291 thousand annually through the 1990s.
Analyst Andrew Copley supported the research for this post. To learn more about the Forisk Research Quarterly (FRQ), click here or call Forisk at 770.725.8447.
Tiny houses on wheels, though tiny in number, are a rapidly growing niche of the housing market. Due to the handcrafted nature of the market they also tend to be lumber intensive. Most are considerably smaller than 320 square feet so they will not be included in manufactured housing statistics. Currently they are not permitted in most jurisdictions and so tend to be placed in rural areas with few regulations. But a few local governments such as Fresno CA are beginning to permit them. It is a market segment worth keeping an eye on.
Thank you, Les.