Although major U.S. housing metrics will decrease in 2007, the rate of decline will likely moderate later this year barring a stall in the economy or recession, according to a new report issued by Fitch Ratings on Wednesday. “In the interim, however, pressures remain intense,” said Robert Curan, managing director and lead homebuilding analyst at Fitch. “Though new and existing home data from the fall of last year to January 2007 implied that demand for single family homes was approaching stabilization, February and March information was somewhat contradictory and suggest that a bottom in housing metrics is not likely for some months yet.” Public homebuilders reported a decline in revenues and deliveries as well as lower margins and sharply weaker profitability, excluding non-cash real estate charges, in the December 2006 quarter. In general, return ratios were well short of a year ago, while most companies’ credit ratios were weaker.
“Delivery comparisons are likely to continue to be soft in the first quarter and margins and profits will be down sharply on a year-over-year basis,” said Curran. For more information, please visit http://www.fitchratings.com.
