Moody's: Homebuilding Looks Stable for First Time Since 2006

The investor service says that homebuilders face the first stable outlook in four years on stronger sales and housing starts

(Bloomberg)—The outlook for U.S. homebuilders improved to "stable" for the first time in almost four years, Moody's Investors Service said today, citing rising sales and the most affordable property market in years.

"Housing starts, new home sales and existing home sales are all showing positive trends," senior housing analyst Joseph Snider said in a note to investors today. "Operating profits of the rated homebuilders are also expected to show modest improvements in 2010."

The pace of new home sales is rising this year after having slowed to a quarter of its July, 2005 volume, according U.S. Commerce Department data. Horsham, Pennsylvania-based Toll Brothers Inc. (TOL) has narrowed its losses and Miami-based Lennar Corp. (LEN) said in September it expects to return a profit next year.