NEW YORK--(BUSINESS WIRE)--Continued housing pressures coupled with possible tightening of the conforming loan market segment paint a dismal 2008 for U.S. homebuilders, according to Fitch Ratings in the latest edition of 'Chalk Line'. 'Considerable inventories of new and existing homes for sale boosted by foreclosures will also exacerbate the already dismal forecast for housing this year,' said Fitch Ratings Managing Director and lead Homebuilding Analyst Robert Curran. The housing contraction unexpectedly gained momentum in 2007 and looks to extend at least well into 2008. Affordability and wavering buyer confidence were the key issues in 2006, while significantly tighter mortgage standards (for subprime and Alt-A) and disrupted mortgage markets were the 'other shoes to drop' in 2007. Typically homebuilders' operating and financial performances (before non-recurring charges) were quite weak in the third quarter, a pattern that is likely to be replicated in fourth quarter-2007 (4Q'07) results. Deterioration in credit metrics continued in the third and fourth quarters, particularly for profit related metrics. Tangible net worth covenants have been and will be challenged. Fitch will provide a recap of 3Q'07 as well as insights into the balance of 2007 and outlook for calendar 2008 during a teleconference to be held on Tuesday, Jan. 15, 2008 at 11:00 a.m. ET (separate press release to follow). 'U.S. Homebuilding: The Chalk Line - Quarterly Update: Winter 2007/2008' is available on the Fitch Ratings web site at www.fitchratings.com.
