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US Housing Starts Outlook, Q3 2019 Update

This is the first in a series related to Forisk’s Q3 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 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).

Through the first half of 2019, U.S. housing starts declined 3.7% year-over-year; single-family starts decreased 4.9%, while multifamily starts dropped 0.8%. The U.S. South, which accounts for the largest share of housing starts nationally, diverged from other regions, gaining 4.9% year-over-year. Though currently tracking below 2018, U.S. housing slowed in the latter part of 2018 after a strong start. On a seasonally adjusted annual rate basis, the first half of 2019 represents a 2.4% increase over the second half of 2018.

Forisk projects 2019 housing starts of 1.253 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 remains consistent with 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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