Home Builder Trends May Improve In Coming Months
U.S. home builders may be poised for a stronger performance in coming months after weakness in recent quarters, thanks to a recent boost in traffic and new home orders, but ultimately the economy will be the deciding factor, according to Fitch Ratings.
"If the economy continues its advance and a moderate number of jobs are added, housing metrics should, for the most part, rise at a single-digit pace this year," said Bob Curran, Fitch managing director and lead homebuilding analyst.
However, "if the broader economy begins to retreat from what gains it has made thus far, U.S. housing is in essence right back where it started about a year ago," Curran said.
The credit ratings company plans to review the fourth quarter and discuss the outlook for the rest of this year during a teleconference set for Monday morning.
The housing market has continued to sputter even as other parts of the economy have shown improvement thanks to higher consumer spending and exports. However, U.S. unemployment remains high and a steady supply of foreclosures is expected to weigh on home sales and prices.
Fitch expects most home builders to report losses for the first quarter as revenue declines from a year earlier. However, according to Fitch "there has been a notable uptick in traffic from much of the first quarter. New home orders have seen some slight seasonal pickup across most regional markets."
Comparisons with last year will ease as the year continues, Fitch noted. Such comparisons are "challenging during the first four to five months of the calendar year before beginning to subside," Fitch said.
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