Industry News

Housing weakness will continue this year, says Fitch report

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Weakness in the housing market should continue in 2007, as issues of affordability, oversupply and poor buyer psychology dominate, and housing starts and home sales are weaker than expected entering the year, Fitch Ratings analysts noted in the latest "Chalk Line" report. Though not likely, the housing downturn "could easily extend another year" if an economic recession develops before the housing downturn hits bottom, Fitch Ratings reported. "Housing continues to contract rather sharply," the report states. "It is difficult to judge the length and ultimate severity of the correction." The average stock price among 15 publicly traded home builders fell 30.4 percent during a period from Jan. 3, 2006, to Sept. 29, 2006, according to the report -- the price per share of Technical Olympic USA stock dropped 55.1 percent and the per-share price fell 48 percent for Beazer Homes USA stock in that time. "The excess supply continues to be troubling," the report states. The inventory of new ...