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US Housing Starts Outlook, Q2 2019 Update: Get It Right The First Time

This is the first in a series related to Forisk’s Q2 2019 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, channel our inner Billy Joel,  and review applied research on business and economic forecasting. 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), PNC, and Wells Fargo. Forisk applies long-term assumptions from the U.S. Energy Information Administration (EIA), the Congressional Budget Office (CBO), and Harvard’s Joint Center for Housing Studies to establish the peak and trend over the next ten years (Figure).

U.S housing starts have increased every year since 2010, and 2018 was no exception. Despite slowing in the latter half of last year, housing starts gained 3.9% year-over-year and improved in all market segments; single-family starts increased 3.2%, while multifamily starts rose 5.7%. However, U.S. housing starts continued their downward trend into Q1 2019, having declined six of the last seven months on a seasonally adjusted annual rate (SAAR) basis. The March reading was the lowest since May 2017.

Overall, Forisk projects 2019 housing starts of 1.254 million, up 0.3% from 2018 actuals. Forisk’s 2019 Base Case stabilizes around its long-term trend of 1.50 million housing starts. Our current forecast represents a downward revision of 2.0% from our previous expectations.

To learn more about the Forisk Research Quarterly (FRQ), click here or call Forisk at 770.725.8447.

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