Fitch: Mixed Messages Should Not Deter U.S. Housing Ramp-Up In 2015

NEW YORK--()--Link to Fitch Ratings' Report: U.S. Homebuilding/Construction: The Chalk Line (Fall 2014)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=781788

Disjointed results of late for U.S. single-family housing should not prevent more consistent growth for next year, according to Fitch Ratings in the latest edition of the 'Chalk Line'.

Consistent economic growth, robust employment gains, attractive affordability and a steady easing of credit standards should accelerate an upturn for housing following a subpar 2014. That said, 'all eyes will once again be on the spring selling season as a key indicator of how robust housing demand will be in 2015,' said Managing Director and lead homebuilding analyst Robert Curran.

Fitch now projects single-family starts to improve 3% to 636,000 as multifamily volume grows almost 17.5% to 361,000. Fitch expects total starts for 2014 to come in at approximately one million. Fitch also projects new home sales to advance about 1.5% to 436,000 while existing home volume is expected to decline 6% to 4.785 million, largely due to fewer distressed homes for sale. In 2015, single-family starts should expand 18% and multi-family volume gain 7%. New home sales should improve 18%, while existing home sales rise 5%.

Fitch expects stable ratings for most issuers within the homebuilding sector during the balance of 2014 and in 2015, reflecting a continued, moderate cyclical improvement in overall construction activity over the next 15 months. There is potential for a few positive outlooks and/or upgrades.

Fitch will provide a brief recap of second-quarter 2014 (2Q'14) and comment on expectations for the 3Q'14 and years 2014 and 2015 during a teleconference to be held tomorrow at 2:00 p.m. ET (separate press release to follow).

Fitch's latest 'U.S. Homebuilding: The Chalk Line - Quarterly Update: Fall 2014' includes the following key updates and new features:

--Homebuilders' quarterly growth trends and margin statistics for 2Q'14, excluding the impact of non-recurring, non-cash real estate charges, are provided;

--Liquidity analyses are updated and historical liquidity profiles are presented for perspective;

--Recovery ratings are detailed for five single B or lower rated homebuilding credits;

--The aging of the housing stock is discussed;

--A new study by the Harvard Joint Center for Housing Studies, 'Housing America's Older Adults' is referenced;

--Highlights of the NAHB's study of the characteristics of subdivisions are provided;

--Data and commentary are provided for NAHB's 55+ housing market index;

--Market penetration by the top 5 and top 10 builders in the largest metro markets for 2013 is noted as are major public builders' positions in the top 50 metro housing markets for 2013;

--Various foreclosure statistics and related data are updated and a summary of historical foreclosure filings is presented;

--There are also updated comments on the Fed and interest rates, government housing legislation, HAMP, HARP, ARMs, AD&C financing, national home pricing trends, demographics, cash sales, lumber prices, Fannie Mae/Freddie Mac, the FHFA, FHA, VA, the MBS market, underwriting standards, owning vs. renting, eminent domain, historical perspective on lot and home prices, trends in home sizes and surveys about potential home ownership; and

--Fitch's economic and construction forecasts for 2014 and 2015 have 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'

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Contacts

Fitch Ratings
Robert P. Curran
Managing Director
+1-212-908-0515
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Robert Rulla
Director
+1-312-606-2311
or
Monica Delarosa
Associate Director
+1-212-908-0525
or
Sandro Scenga
Media Relations
+1 212-908-0278
New York
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Robert P. Curran
Managing Director
+1-212-908-0515
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Robert Rulla
Director
+1-312-606-2311
or
Monica Delarosa
Associate Director
+1-212-908-0525
or
Sandro Scenga
Media Relations
+1 212-908-0278
New York
sandro.scenga@fitchratings.com