Though U.S. housing remains in a fairly severe, multi-year contraction, the sector appears to have seen the worst of it, with declines not as severe going forward, according to a report released by Fitch Ratings on Friday. “Various recent data such as sales of new and existing homes, trends in pending sales of existing homes, mortgage applications and housing affordability, are implying that demand for single family homes has begun to stabilize, albeit at low levels,” said Managing Director and lead homebuilding analyst Robert Curran. “For the moment, however, affordability issues, excess supply and poor buyer psychology still dominate, and the sector is not immune to a continued downturn should a recession develop before the current housing correction troughs.” For the most part, pubic homebuilders reported a decline in revenues and deliveries as well as lower margins and sharply weaker profitability in the September 2006 quarter. In general, return ratios were short of a year ago, while most companies’ credit ratios were somewhat weaker. Delivery comparisons are likely to be even less robust in the fourth quarter and margins and profits will be down sharply on a year-over-year basis. All homebuilders tracked reported better profits for calendar 2004 and 2005 (following record profits during each of the prior 6-to-12 years or more).
Most Popular Articles
Latest Articles
Selling your home to a family member in 5 easy steps
Selling your home to a family member can be beneficial but requires careful planning and transparent communication. Follow these five steps to ensure a smooth transaction, from agreeing on logistics and assembling a professional team to determining your home’s value and understanding tax implications.
-
FOA reverse stock split goes into effect, appears to have intended impact
-
Senate Aging Committee leaders introduce bill on aging in place
-
HousingWire Pulse: Respondents show cautious optimism about the Q3 housing market
-
US Senate committee approves full funding for Ginnie Mae
-
Connecticut Senator asks HUD for answers on backlog of discrimination complaints