June 22 - Fitch homebuilding analyst Bob Curran says the recovery in housing is ''two steps forward, one step back'', and that if the U.S. economy should stall, the homebuilding market could react negatively.
It's been a big week for housing data with homeowners sentiment improving in billing permits rising. But what price isn't sales still under pressure should halt building firms be ready to declare a turnaround. For his -- and joined by Bob current senior director. At Fitch ratings Bob nice to talk you. Her rising but just actually breaking less Graham in May is a -- issue would -- for others going. -- Well first rounder I wouldn't read too much into. A single month statistics. That having been said the great fall until he was in multifamily. The single family continue to show improvement in effect it's had three consecutive months of improvement. The multifamily by its nature tends to be more. Erratic. We -- economists are looking for new homes sales to see a slight pick up where we get that report from may next week is that trying to -- -- continue over the summer. I think it probably will. But I would emphasize that as we look at the statistics so far this year. I think a pattern has developed and will continue that is somewhat. Erratic pattern of recovery. In fact a recent report put out right turn to two steps forward one step back. And I kind of think that's the way a lot of the statistics. Will reflect for much of the year. I guess at least provide forward a little bit so her some improvement there Bob homebuilding stocks have been on its hair since October what. Seeing from the credit died. Well there's been some similar response on the credit side. Spreads have tightened. I think investors have both stripes are reacting to what has been. Particularly for the public companies a very good spring. Past few years the spring selling season. The most important selling season of the year has been disappointing so this year it stands out by comparison. All right another plus now is there any risk at all to the current ratings for the home builders. Considering that economists and even the -- increasingly concerned about a possible economic slowdown here ahead. Well. First -- economies are growing very fast right now so. The industry has been able to show improvement in a mildly growing economy if the economy were to stall. We're going to recession. Unfortunately I think housing would respond in a negative way. Two that. Even though the various macro statistics from starts to new home sales existing home sales. Continue to be at very low levels by historic standards. It's his pop current -- and it's your time appreciate it thank you. I'm Rhonda schaffler that this writers.