As the price of lumber raced up to over $1,500 per thousand board feet in the spring of 2021, economists acknowledged that the supply side of the economy simply couldn't sustain the housing demand rush unleashed by the pandemic. Of course, we'd later learn that this inflationary phenomena stretched far beyond housing, and that lumber was actually the canary in the coal mine for inflation at large.

That predictive power is why economists and analysts alike are once again paying close attention to lumber: After nosediving to $383 per thousand board feet by the end of 2022, the lumber futures price has since jumped 19% to $454 as of Wednesday.

Does this slight rebound in lumber prices—which floated between $350 to $550 in the years leading up to the pandemic—just mean that lumber is nearing its bottom? Or does it signal some broader rebound in the slumped U.S. housing market?

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To better understand where lumber and the U.S. housing market might head next, Fortune reached out to Dustin Jalbert, senior economist of wood products at Fastmarkets.

Here are Jalbert's five bold predictions for where the lumber market heads next.

1. U.S. housing starts have further to fall

Jalbert expects U.S. housing starts to drop by double-digits this year. His reasoning? New home sales in the U.S. have been off by 20-30% since the beginning of last year because of “plummeting home affordability,” triggered by high mortgage rates and high home prices. Cooling demand coupled with a historic number of homes currently under construction, which creates a flow of “shadow” inventory, worsens the oversupply and triggers a pullback in housing starts.

Although it’s widely forecasted that housing starts will drop this year, by how much exactly varies. Jalbert expects housing starts to drop 13%, which he says leans towards the optimistic side. The outlook is a bit more gloomy for single-family homes, which he predicts will fall by 16% in 2023 as mortgage rates continue to hover around 6%. However, for multifamily starts, Jalbert predicts it’ll drop 7% this year.

The difference between the two outlooks is based upon strong apartment demand that’s expected to pull multifamily starts forward. But supply chain disruptions, labor shortages, rent growth, and challenging financial conditions will put the same downward pressure on multifamily starts as single-family starts.

2. Lumber demand will drop again

U.S. lumber consumption will fall somewhere between 4% and 5% in 2023, Jalbert predicts. He estimates that in 2022, lumber consumption fell by 1.6% as a result of "sudden weakening in new residential construction activity in the second half of the year and a major correction in do-it-yourself (DIY) lumber demand."