NEW YORK — Moody’s Investors Service raised its outlook on U.S. homebuilders to positive from stable, as it said low interest rates, strong affordability and pent-up demand boost homebuilders’ prospects.
Moody’s senior credit officer Joe Snider said revenue growth for the sector should rise by over 10 percent for this and next year and gross margins will approach 20 percent on average in 2013. The ratings firm also expects volumes to continue improving and prices to stabilize, he said.
Moody’s said margins for Toll Brothers Inc., Standard Pacific Corp. and Lennar Corp. were already above 20 percent, though a handful of other Moody’s-rated homebuilders are still struggling to see significant margin improvement.
The positive outlook considers that renewed, post-downturn consumer demand and historically low interest rates will boost home sales over the next 12 to 18 months, though a flood of foreclosures could weigh on any increase in home sales, Moody’s said.
