Fitch: Spike in Starts a Sign That U.S. Housing is Now Thriving Endorsement Policy
18 Apr 2013 9:31 AM (EDT)
Link to Fitch Ratings' Report: U.S. Homebuilding/Construction: The Chalk Line
Fitch Ratings-New York-18 April 2013: Single family U.S. housing starts posted a solid March while multifamily results were spectacular, an encouraging sign that the housing market's moderate recovery may pick up in intensity in the coming months, according to Fitch Ratings in the latest edition of the 'Chalk Line'.
Single-family starts came in at 619,000 (down 4.8% compared to February) and up 28.7% year-over-year, largely in line with expectations. Total starts for March were 1.036 million, up 7% compared to February and 46.7% higher year-over-year. Total starts were significantly higher than expected because of the multifamily component. That said, multifamily numbers are often extremely volatile month-over-month and are coming off a somewhat disappointing February.
Nonetheless, total starts are up 36% so far this year, while single-family starts are 28.1% higher than this point in 2012. The spike in overall activity is good news for the public homebuilders, which gained market share last year and are poised to follow suit in 2013. What's more, still-attractive home prices, low mortgage rates and a rise in nominal incomes are resulting in superior affordability and valuations,' said Managing Director and lead homebuilding analyst Robert Curran.
That said, housing is still treading in unsteady waters for numerous reasons. 'Realized demand is and will continue to be tempered by widespread negative equity, challenging mortgage qualification standards, lot shortages, and excess supply due to foreclosures in certain markets,' said Curran.
Fitch will provide a brief recap of the fourth-quarter and year 2012 and comment on the outlook for 2013 during a teleconference to be held this Friday April 19 at 11:00 a.m. ET (separate press release to follow).
Fitch's latest 'U.S. Homebuilding: The Chalk Line - Quarterly Update: Spring 2013' includes the following key updates and new features:
--Homebuilders' quarterly growth trends and margin statistics for 4Q'12, excluding the impact of non-recurring, non-cash real estate charges, are provided as is information about the calendar fourth quarter and fiscal year 2012 option write-offs and land value write-downs;
--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;
--A decreasing lot supply is referenced;
--Additional historical information about immigrant housing demand and related state and national household and home ownership projections are provided;
--Data for building trades employment since the last housing peak are noted;
--Updated Census Bureau population projections are detailed;
--2012 statistics for vacation home sales and investor purchases are referenced;
--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 is presented;
--There are also updated comments on HAMP, HARP, the appraisal process, AD&C financing, homeownership trends by age, Chinese drywall litigation, home pricing, Fannie Mae/Freddie Mac, FHA, the MBS market, underwriting standards and surveys about home ownership; and
--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.