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Individual Highlight

Housing markets are critical to the wood products industry

Photo of Historically, U.S. housing construction and sales have been a major component of U.S. gross domestic product (GDP). Historically, U.S. housing construction and sales have been a major component of U.S. gross domestic product (GDP). Snapshot : U.S. and international housing markets are critical to the wood products industry, as new single-family units consume more value-added wood products than any other wood consuming sector.

Principal Investigators(s) :
Alderman, Delton 
Research Location : Princeton, WV
Research Station : Forest Products Laboratory (FPL)
Year : 2017
Highlight ID : 1288

Summary

The U.S. housing market is yet to fully recover from the global financial crisis of 2007 to 2009. New single-family house construction and sales lag far less than their respective historical averages. In 2016, multifamily housing permits and starts remained above their average for the past 20 years, but single-family housing starts are less than their historical average. As such, the number of dwellings being built is insufficient to match population growth. Of note is the lack of “starter” houses being constructed, with builders instead focusing on higher priced tier houses in the past few years. This is noteworthy because new single-family starts consume more value added products than any other wood consuming sector in the U.S. Since the nadir of the financial crisis, multifamily housing has been robust and the majority of units built were Class A or luxury units – mirroring single-family construction. From 2011 through 2016, multifamily housing comprised nearly one-third of all U.S. housing starts. Historically, U.S. housing construction and sales have been a major component of U.S. gross domestic product (GDP). If the U.S. new construction market remains at current levels, the overall U.S. GDP may remain tepid. All sectors of the U.S. housing market improved in 2016. The U.S. forecast is for incremental improvement through 2019. Housing in the Euro region remains hindered by bimodal economies: several countries’ economies remain stressed while other Euro region countries currently have improved. Germany, France, United Kingdom, Italy, and Spain (in descending order, by market value) are projected to have the largest combined new construction and remodeling markets (value basis) through 2019. Canada’s housing market was steady in 2016 and projections are for a gradual improvement in starts and sales through 2018. Housing completions in the Russian Federation decreased in 2016, with 1.15 million new residences completed, a year-over-year decrease of 3.4 percent, while residential floor area put in place decreased by 6.7 percent (79.3 million square meters).

Forest Service Partners

External Partners

 
  • United Nations-Economic Commission for Europe, UNECE Timber Committee, Geneva, Switzerland
  • Virginia Polytechnic Institute and State University