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With major new home metrics leveling off from fresh lows, the long-awaited bottom in U.S. housing may finally be in sight, according to Fitch Ratings.

‘Single family housing starts and new home sales seem to be indicating a trough, albeit at very low levels absolutely and by historical comparisons,’ said Managing Director and lead home building analyst Bob Curran. ‘The early stages of this recovery may be more muted than average recoveries of the past.’

The first year of a recovery tends to reflect a sharp upward thrust indemand. However, following an untypical expansion and then untypical correction, Fitch anticipates that the early stages of this recovery may be more muted than the average.

This is reflected in Fitch’s full-year forecasts for 2009 and initial forecasts for 2010. In addition, if the forecasts are correct, despite having fewer competitors builders will continue to be challenged and need to maintain tight controls over costs and expenses during the balance of this year and in 2010.

“If updated forecasts for 2009 and initial forecasts for 2010 are correct, public builders will continue to be challenged and need to maintain tight controls over costs and expenses during the balance of 2009 and next year despite having fewer competitors.” Fitch says.

For details see U.S. Homebuilding: The Chalk Line - Quarterly Update: Summer 2009.

Source: Fitch Expects Slower than Usual Recovery of Housing Sector