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THE LATEST ANALYTICS February Data Show 100 S tabilizing home prices and employment figures helped add 29 metropolitan areas to a 69-area list of improving markets for February, according to a recent index from the National Association of Home Builders (NAHB). The trade group released the figures with the First American Improving Markets Index, which adjusted housing numbers for 36 states to disclose that nearly 100 markets continue to see an upswing. "The number of improving housing markets has risen for six consecutive months, and 36 states now have at least one metropolitan area on the list," Bob Nielsen, NAHB chairman and a Reno-based homebuilder, said in a statement, adding that "despite the many challenges that continue to drag on a housing recovery—including the tight lending environment for builders and buyers— improving conditions are slowly but surely spreading from one housing market to the next." "The fact that there are nearly 100 markets now on the improving list shows that the momentum is building for a housing recovery and that more buyers and sellers are starting to feel confident enough to S&P Says Outlook for T he outlook for credit quality in the U.S. homebuilding division is generally stable but could turn negative if any of the sector's primary supports give way in the second half of 2012, ratings agency Standard & Poor's said. "We currently anticipate a modest uptick this year and more robust growth in 2013," S&P credit analyst Susan Madison said in a statement. The ratings agency released an economics and ratings outlook that forecasted a rise for hous- ing starts and sales this year, which it buffeted by saying that multifamily rentals may trump single-family homeownership into 2013. "Despite the rough road, we believe single-family housing and sales have likely troughed, and most rated builders are gaining market share—albeit of a much smaller pie," she added. S&P attributed its analysis to several economic fundamentals, including elevated unemployment rates, high foreclosure invento- ries, and stringent underwriting and appraisal standards. Of the 16 companies and $19.2 billion of total obligations the agency rates, 15 remain in the speculative-grade category. Housing Markets on the Uptick Statistics from the NAHB reveal positive movement for some major metro markets. return to the market," said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. The index showed a steady improvement in markets along the lines of housing permits, home prices, and job growth, adding seven previously hard- hit markets to replace outgoing ones with softening figures for home prices. NAHB Chief Economist David Crowe said that the latest signs for better health in the market economy demonstrate "that a large cross section of the country is starting to turn the corner as local economic conditions stabilize." Good Statistics Drive Home Builder Confidence A DECENT DECEMBER FOR CONSTRUCTION HELPS IMPROVE GENERAL CONFIDENCE FOR HOMEBUILDERS. H omebuilder confidence in the single-family market ended the fourth quarter last year on a climb uphill as the wider economy showed improvement. The National Association of Home Builders (NAHB) released a market index in recent weeks that recorded a four-point increase year-over-year to 18 for homebuilders in the single- family sector. The trade group bases the 55-plus single-family index off of builder senti- ment centered around current home sales, prospective buyer traffic, and forecasts for sales six months down the road. Anything above 50 signals a positive outlook among homebuilders for the market. The index fielded improvements Homebuilders Cautiously Stable Reports from the ratings agency indicate that professional homebuilders in the U.S. may get a more predictable 2012. The ratings agency currently maintains stable outlooks on two- thirds of the homebuilders it rates. Homebuilders still face weak buyer demand, changing housing preferences, and competition from re-marketed foreclosed homes, it said. The economic outlook for 2012 "calls for a slow, mild, uneven recovery, with real GDP grow- ing about 2 percent in 2012 and improving slightly in 2012." "While we expect most rated builders to be modestly profit- able in 2012, we expect credit metrics to remain very elevated through the balance of 2012," Madison said. across the board year-over-year, with confidence about current sales ticking up four points to 17, anticipated sales for the next six months up two points to 26, and prospective buyer traffic on a five-point upswing to 15. "We are seeing increased optimism from builders in the 55-plus hous- ing segment," NAHB chairman Bob Nielsen, a Reno-based homebuilder, said in a statement. He said that market conditions remain weak since homeowners feel "concerned about selling their existing home at a fair price, due to low apprais- als, an abundance of foreclosures, and tighter mortgage lending criteria." Homebuilders also felt more con- fident about multifamily construction, with thoughts about present produc- tion up 17 points to 34, expected future production up 12 points to 35, and current demand for existing units up 14 points to 42. "As with the overall single-family housing market, we are seeing gradual, but steady, improvement in the 55-plus market segment," said NAHB Chief Economist David Crowe. He said that 18 marked the highest fourth-quarter reading for the 55-plus market in the history of the index, which the NAHB created in 2008. THE M REPORT | 61 ORIGINATION SERVICING ANALYTICS SECONDARY MARKET