Year-over-year gains for single-family starts and new home sales have been sustaining the momentum of earlier this year and new homes and existing home sales have also been advancing. Year-to-date U.S. housing metrics are well above 2011 levels, according to Fitch Ratings.
Fitch has again raised its housing forecasts for 2012, but the ratings service still assumes a moderate rise off a very low bottom. Fitch projects single-family housing starts to improve about 19 percent, new home sales to rise approximately 19.5 percent and existing home sales to grow 8.5 percent in 2012.
Sales growth will be somewhat less robust next year, according to the rating service. 2013 single family-starts should expand 14 percent while new home sales grow 13 percent. Existing home sales should increase 4.5 percent.
“The major public builders generally realized much stronger results y-o-y in the first half and gained market share. On average net new orders were up 30.2 perce t. The unit backlog typically improved 41.3% (48.2 percent on a dollar basis). The implied price in backlog grew 5.4 percent (more from mix than overt price increases)” Fitch said in its Chalk Line report.
“The housing recovery had been long delayed, and has so far been somewhat irregular and below historic patterns… With the U.S. economy moving from recession to expansion in the third quarter of 2009, plus very attractive housing affordability and government incentives, housing was jump-started. However, faltering consumer confidence, among other issues, had largely restrained the recovery. New home sales and single-family starts retested the bottom during the summer of 2010 and in February 2011,” Fitch said.
“Challenges remain, including continued relatively high levels of delinquencies, potential of acceleration in foreclosures, and consequent meaningful distressed sales and restrictive credit qualification standards,” Fitch noted.
Both Fannie Mae and Freddie Mac are more optimistic in their forecasts. Fannie sees new home sales increasing 20.2 percent this year and another 17.9 percent next year, and existing homes rising to 7.8 percent by the end of this year and 3.9 percent next year.
Freddie’s economists see total home sales up 8.9 percent this year and 8.1 percent next year, with starts up 22.9 percent in 2012 and another 21.3 percent next year.