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we are likely positioned in our current housing cycle. According to Tomalak, the average housing recovery has lasted five years. We are now in our sixth year of recov- ery. By the end of 2019, the market will have grown for nine years. By then, labor availability issues, the specter of rising interest rates and lower affordability have had an impact on the market, assumes the Burns' forecast. "I think having a reset at 2019 is sort of a modest realization of the idea that we will see perpetual growth isn't very realistic, and we have to mark it down at some point," Tomalak notes. at being said and if history and demographics are any guide, the forecast predicts the market will only pause in 2019 and resume growth for several additional years beyond that point. e Burns forecast relies on information gathered from previous housing bubbles in the 1980s and early 1990s burst in Houston and Southern California respectively. In those cases, where house prices fell by as much as 70 percent, the recoveries extended 20 years with only slight interruptions for two national recessions. ose local and regional recoveries are the nearest historical equivalent to the national housing downturn in 2008, and the forecast assumes the recovery will likely take the same track. Demographics also play a factor. A new book com - ing this fall from the company highlights the current and past levels of household formations, also known as headship rates. "e group of people who are born in the '80s and who are forming households now, the headship rate is comparable to levels we typically associate with depres- sion babies. So if we roll up what type of headship rates might happen, there is a really strong case to see 12.5 million household formations between 2016 and 2025," Tomalak explains. "If we see a reset in 2019, it allows for the possibility of some fairly strong numbers after that. But modesty tells us there are some real headwinds that need to be resolved before that can fully play out." | John Burns Real Estate Consulting LLC is widely respected for its forecasts in residential new construction as well as its coverage of major companies serving residential construction. Firms interested in learning more about the new forecast can email Burns' SVP Lisa Marquis Jackson at lmjackson@realestateconsulting.com. We are now in our sixth year of recovery. By the end of 2019, the market will have grown for nine years. 10% 0% 0% 10% 20% 20% 30% 30% 40% 40% 50% 50% 60% 60% Actual Use of HELOC Money Home Renovation Priority: Use of HELOC Money Source: TD Bank Survey: 2016 HELOC Index (Data Feb. 2016, Pub: Aug. 2016) In a February 2016 survey, 60 percent of consumers said the reason for acquiring a HELOC is home renovation and improvements. Source: TD Bank Survey: 2016 HELOC Index (Data Feb. 2016, Pub: Aug. 2016) Forty-two percent of homeowners say they would renovate the kitchen first, followed by 25 percent wanting to renovate bathrooms. Home Renos/ Improvements Emergency Funds Major Home Purchases Debt Consolidation Medical and Healthcare Vehicle Purchase Education Expenses Travel/ Vacation Day-To-Day Expenses Other Kitchen Bathroom Living Room Basement Bedroom Dining Room Other 60% 42% 25% 9% 7% 5% 11% 1% 27% 27% 25% 18% 17% 11% 10% 9% 9% QualifiedRemodeler.com QR October 2016 37