NEW YORK – April 23, 2014 – Despite weak underlying consumer momentum this spring, U.S. housing should improve later in 2014 due to faster economic growth, according to Fitch Ratings in the latest edition of the "Chalk Line."
"Comparisons have been a challenge so far this year, with most housing metrics falling short of expectations from a year ago," said Robert Curran, managing director and lead homebuilding analyst for Fitch Ratings. "Though the severe winter throughout much of North America has restrained some housing activity, buyer sensitivity to home prices and finance rates and the slowing of job growth at year-end is resulting in diminished consumer momentum."
That said, Fitch expects stable ratings for most issuers within the homebuilding sector in 2014, reflecting a continued, moderate cyclical improvement in overall construction activity as the year progresses. There is even potential for a few upgrades among some homebuilders.
Housing should improve in 2014 due to faster economic growth and some acceleration in job growth, despite somewhat higher interest rates, as well as more measured home price inflation.
However, Fitch is tapering its year-end forecast to reflect a subpar spring selling season. Single-family starts are now projected to improve 15 percent to 710,000 as multifamily volume grows about 9 percent to 335,000.
Overall, Fitch predicts that total starts this year should top one million. Fitch projects new home sales will increase about 16 percent to 500,000 and existing home sales to remain flat at 5.10 million. This is largely due to fewer distressed homes for sale. New home price inflation should moderate in 2014, at least partially because of higher interest rates. Average and median new home prices should rise about 3.5 percent in 2014.
© 2014 Florida Realtors®
How does Nassau County compare?
Single family home sales for the month of March were up 28.6% over last year. Cash sales were up 16% and pending sales up 14%. Contrary to last years trend, new homes listed (inventory) rose 23.9% over 2013 and the months supply of inventory (turnover) dropped from 9.0 months to 6.8 months. The median days a home stays on the market also fell 17% from 74 days to 61 days.
Of the 90 closed sales in March, the majority fell in the $300,000 - $399,999 price range. The average sale price compared to March 2013 stayed very close to the same at $250,226 versus $247,815.
With a 14% increase in pending sales and improved weather, these positive trends should continue throughout the 2nd quarter.
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