Fitch: Strong Starts a Sign That U.S. Housing Now Firing On Most Cylinders
Link to Fitch Ratings' Report: U.S. Homebuilding/Construction: The Chalk Line - Winter 2012/2013
Last month's solid single family housing starts and an unexpected jump in multifamily starts are clear signals that 2013 should begin strongly for U.S. housing, according to Fitch Ratings in the latest edition of the 'Chalk Line'.
Single family housing starts came in at 616,000 for December, which was on target with Fitch's expectations. However, multifamily housing starts vaulted to 338,000. This increase may be attributable to good weather and the aftermath of Hurricane Sandy. However, it should be noted that the multifamily numbers were strong in most regions of the United States.
'Most housing macros continue to grow, helped by favorable affordability and buyer psychology,' said Managing Director Robert Curran. 'The major public builders are pacing the industry as reflected in their net orders and backlog.'
That said, Fitch expects the rate of growth to moderate as 2013 wears on.
Fitch's housing forecasts for 2012 have been enhanced since the last quarterly. Fitch estimates that single-family housing starts improved about 24%, new home sales rose approximately 20%, and existing home sales grew 10%. That said, Fitch envisions housing growth to be somewhat less robust this year.
Fitch projects 2013 single family-starts to expand 18%, new home sales advance 22% and existing home sales should increase 7%.
Fitch will provide a brief recap of the third-quarter 2012 as well as discuss the full year of 2012 and comment on the outlook for 2013 during a teleconference to be held this Tuesday Jan. 22 at 11:00 a.m. ET (separate press release to follow).
Fitch's latest 'U.S. Homebuilding: The Chalk Line - Quarterly Update: Winter 2012/2013' includes the following key updates and new features:
--Homebuilders' quarterly growth trends and margin statistics for 3Q'12, excluding the impact of non-recurring, non-cash real estate charges, are provided as is information about the calendar third quarter and fiscal year-to-date option write-offs and land value write-downs;
--Current builder margin trends are reviewed;
--Liquidity analyses are updated and historical liquidity profiles are presented for perspective;
--Recovery ratings are detailed for six single B or lower rated homebuilding credits;
--Obama Administration's potential second term housing policy objectives and challenges are explored;
--Improving migration trends are discussed;
--Information about builders' financial services/mortgage banking activities is noted;
--Trends in homebuilder gross margins, excluding impairment and write-offs and before interest
expense, are chronicled;
--The NAHB's Improving Markets Index is highlighted;
--Various foreclosure statistics and related data are updated and a summary of historical foreclosure filings is presented;
--There are also updated comments on possible changes to the mortgage interest deduction, 'qualified mortgages', owning vs. renting comparisons, Chinese drywall litigation, QE3 and related, strategic defaults, home pricing, Fannie Mae/Freddie Mac, FHA, the MBS market, underwriting standards and surveys about home ownership;
--Fitch's economic and construction forecast for 2013 has been updated.
The report is available at 'www.fitchratings.com' under 'Latest Research' or by clicking on the above link.
Additional information is available at 'www.fitchratings.com'
Robert P. Curran
Fitch Ratings, One State Street Plaza, New York, NY 10004