Fitch: U.S. Housing Set to Spring into Spring After Ho-Hum Start

Link to Fitch Ratings' Report: U.S. Homebuilding/Construction: The Chalk Line (Winter 2013-2014) http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=728315

Although U.S. home sales are currently lackluster, a stronger economy and better employment numbers should likely counter higher interest rates and more restrained price increases in 2014, according to Fitch Ratings in the latest edition of the 'Chalk Line'.

Fitch expects stable ratings for most issuers within the homebuilding sector in 2014. The ratings stability reflects a continued, moderate cyclical improvement in overall construction activity during the year. That said, there is potential for a few upgrades, said Managing Director Robert Curran. 'Housing metrics should increase in 2014 due to faster economic and job growth despite somewhat higher interest rates, as well as more measured home price inflation,' said Curran.

Fitch projects single-family starts to improve 20% to 746,000 in 2014 as multifamily volume grows about 9% to 328,000. Thus, total starts in 2014 should top one million. Fitch forecasts new home sales to advance about 20% to 518,000 while existing home volume increases 2% to 5.16 million. New home price inflation should moderate in 2014 partially because of higher interest rates. Average and median new home prices should rise about 3.5% in 2014.

Fitch will provide a brief recap of the third-quarter 2013 (3Q'13) and comment on the expectations for 4Q'13 and 2014 during a teleconference to be held this Thursday Jan. 23, at 11:00 a.m. ET (separate press release to follow).

Fitch's latest 'U.S. Homebuilding: The Chalk Line - Quarterly Update: Winter 2013/2014' includes the following key updates and new features:

--Homebuilders' quarterly growth trends and margin statistics for 3Q'13, 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 six single B or lower rated homebuilding credits;

--Homeownership rates by region are presented;

--The disparity between new and existing home prices is discussed;

--2013 mover rates are described;

--Highlights of annual characteristics of new housing for 2012 are introduced;

--Builders' regional confidence indexes are displayed;

--NAHB' trends in construction cost survey have been updated for 2013;

--Trends in homebuilder gross margins, excluding impairment and write-offs and before interest expense, are chronicled;

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

--There are also updated comments on the Fed and interest rates, government housing legislation, HAMP, HARP, ARMs, the appraisal process, AD&C financing, national home pricing trends, metropolitan home prices, eminent domain, strategic default, jumbo loans, investors, lumber prices, demographics, Fannie Mae/Freddie Mac, the FHFA, FHFA lawsuits, Dodd-Frank regulations, FHA, the MBS market, underwriting standards, and surveys about home ownership;

--Fitch's economic and construction estimates for 2013 and forecast for 2014 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'

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Fitch Ratings
Robert P. Curran, [phone]
Managing Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Robert Rulla, [phone]
Director
or
Monica Delarosa, [phone]
Associate Director
or
Media Relations
Sandro Scenga, New York, [phone]
[e-mail]