Fitch: 2011 still looking bleak for new, existing home sales
New home sales are expected to decline by the year’s end, although 2012 looks brighter, according to Fitch Ratings.
New home sales are expected to decline by the year’s end, although 2012 looks brighter, according to Fitch Ratings as reported on MarketWatch.
“The seasonal pickup in the spring orders did little to improve hopes of increased profits for the full year for public builders,” said Fitch’s managing director and lead homebuilding analyst Robert Curran. In any case, builders by and large will be unprofitable in the second quarter (excluding non-cash real estate charges) with revenues trailing a year ago.
“If the economy continues its lackluster advance and rate of jobs added, new home sales may decline by 4.7 percent this year,” said Curran. Conversely, 2012 housing metrics may show modest improvement off a very low bottom. This comes amid a somewhat stronger economy with slightly lesser distressed home sales competition and less competitive rental cost alternatives, but modestly higher mortgage rates.
Additional projections for this year and 2012 are:
- Single-family starts of 436,000, down 7.4 percent in 2011: starts up 11.9 percent in 2012.
- New home sales of 307,000, off 4.7 percent in 2011; sales up 15 percent in 2012.
- Existing home sales of 4.81 million, down 2 percent in 2011; existing sales up 4 percent in 2012.