Just two weeks after declaring home prices are overvalued by 10 percent, Fitch Ratings said yesterday that December’s solid single family housing starts and an unexpected jump in multifamily starts are clear signals that 2013 should begin strongly for U.S. housing.
Single family housing starts came in at 616,000 for December, which was on target with Fitch’s expectations. However, multifamily housing starts vaulted to 338,000. This increase may be attributable to good weather and the aftermath of Hurricane Sandy. However, it should be noted that the multifamily numbers were strong in most regions of the United States.
‘Most housing macros continue to grow, helped by favorable affordability and buyer psychology,’ said Managing Director Robert Curran. ‘The major public builders are pacing the industry as reflected in their net orders and backlog.’
On January 4, Fitch said home prices were overvalued and price growth is not being driven by fundamentals but by technical factors that could easily change. The ratings service said national prices are, but will likely drop by no more than 2 percent due to inflation.
Yester Fitch said its housing forecasts for 2012 have been enhanced since the last quarterly data was released. Fitch estimates that single-family housing starts improved about 24 percent, new home sales rose approximately 20 percent, and existing home sales grew 10 percent. Fitch envisions housing growth to be somewhat less robust this year.
Fitch projects 2013 single family-starts to expand 18 percent, new home sales advance 22% and existing home sales should increase 7 percent.