Fitch: U.S. Housing Primed for Accelerated Growth in 2H'14

Link to Fitch Ratings' Report: U.S. Homebuilding/Construction: The Chalk Line (Summer 2014)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=751135

Encouraging economic and housing macro statistics of late are helping to position U.S. housing for more pronounced growth for the second half of this year, according to Fitch Ratings in the latest edition of the 'Chalk Line'.

Demographics, attractive affordability and a steady easing of credit standards should sustain and ultimately accelerate an upturn for housing following a subpar start to 2014. That said, 'The spring selling season was underwhelming enough that this, along with more guarded expectations for the next few months, will lead to more modest growth for macro housing statistics before the year is through,' said Managing Director and lead homebuilding analyst Robert Curran.

Fitch now projects single-family starts to improve 9.5% to 677,000 as multifamily volume grows almost 12% to 343,000. Fitch still expects total starts for 2014 to exceed slightly more than one million. Fitch also projects new home sales to advance about 8% to 465,000 and existing home volume to decline 5% to 4.835 million, largely due to fewer distressed homes for sale.

Fitch expects stable ratings for most issuers within the homebuilding sector during the second half of 2014, reflecting a continued, moderate cyclical improvement in overall construction activity as the year progresses. There is potential for a few positive outlooks and/or upgrades.

Fitch will provide a brief recap of first-quarter 2014 (1Q'14) and comment on the expectations for 2Q'14 and years 2014 and 2015 during a teleconference to be held this Wednesday, July 23, at 11:00 a.m. ET (separate press release to follow).

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

--Homebuilders' quarterly growth trends and margin statistics for 1Q'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 variability of new home sales during recoveries is referenced.

--The under representation of young adult home owners, including those burdened with student debt, is analyzed.

--Our discussion of the historical pace of recovery is updated for the current upturn.

--Highlights of annual characteristics of new housing for 2013 are presented.

--Fitch summarizes the results of NAR's latest profile of international home buying activity.

--The Harvard Joint Center's revised forecasts of household growth are rendered.

--A presentation of reasons motivating people to move between 2012 and 2013 is referenced.

--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, shadow inventory, cash sales, jumbo loans, investors, lumber prices, Fannie Mae/Freddie Mac, the FHFA, FHA, the MBS market, underwriting standards, and surveys about home ownership.

--Fitch's economic and construction forecasts for 2014 have been updated and initial projections for 2015 are provided.

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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