Wealth Strategies: 2012 1st in multi-year housing recovery
Wednesday, December 19, 2012 - 04:43
Dec. 19 - Fitch's Bob Curran expects continued stabilization in the housing market in 2013 and feels companies like D.R. Horton, Meritage and Standard Pacific are best poised to see upgrades.
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How mark can get on our -- -- during this year but there are still continued economic concerns that building fiscal quit being one of them. So does recovery last into 2013. Here at his exclusive report on the outlook for housing and others is -- and managing director -- Fitch ratings gives -- enough. So we saw mixed data today on housing -- -- in terms of construction numbers. Is there enough and what we've seen so far on the data side to pin our hopes our car. -- -- thirteen. I think there is and in fact I think 2012. When will be seen as the first year of a multi year recovery. In 2013. I think we'll see are relatively similar growth in the the major housing macros yes. What we've seen in 2000. And it turns up from the translation into numbers what does that mean for home prices for instance and that increase in starts. Well first in terms of the starts. Starts actually in 2012 were paced by multifamily. Which were particularly vibrant. Nonetheless. The single family were still up in excess of 20%. We see a further -- gains. In that neighborhood in 2013. For single family starts the multifamily although still. Showing double digit increases. Aren't likely to be as robust. As was the case in 2012. In the case -- home prices. Home prices drugs Census Bureau average prices for example probably. In 2012. Were up in the neighborhood of three and a half to 4%. We see a similar increase in 2013. And and that bodes well for housing in general. An effect do you believe there is potential for upgrades in the building sector and 2013. Tell me a little bit about which companies would be in the best shape and it and they are more vulnerable. Query. Well first of all of the companies will benefit from. Of an uptick in the housing macros. But there are few companies from credit rating perspective. Bit seem poised to be able to take. Full advantage of that and have that potential of moving up and positive territory. When it comes to mind among the larger builders as DR Morton. A couple of other companies more intermediate sized companies. That have some potential. Would be Meritage Homes in Standard Pacific corporate. And it all up from the housing crisis a lot of that was with private sellers are any public. Home builders threatened at all heading to 2813. -- -- can always being missteps. And if the housing recovery. Counter to what we expect we're to falter and that probably would be because of something happening economically. Such as the fiscal cliff. Being realized -- recession developing. Then that company that has overspent Donnelly and much reduced liquidity. Could be in a more precarious position. In general terms but. The big public companies have typically been able to access the capital markets over recent years and this year and at the moment seem to have adequate liquidity. Relative to the kind of spending patterns they've been. I've realizing. During 2012 an expected for 2013. We know low mortgage rates have helped the housing market do you expect those rates to stay as close -- they are now. -- rates of kind of confounded the experts for an extended period of time. How much are too many experts have been correct with the direction of rates -- on the absolute level in their predictions. That having been said we think that rates could creep up 3040 basis points from where they are now. But mortgage rates are very very low by historic. Comparisons. And even moving up. The modest amount we suggest I don't think would deterred demeaned in effect it might prompt some fence sitters. To come out and -- To spot current thanks much for your outlook appreciate it thank you. I'm Rhonda schaffler that this writers.
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