Analyst Predicts Improvement in Home Building

Credit Suisse home-building analyst Dan Oppenheim predicts in a note to clients that 2010 will be a strong year for home builders, but also points out these threats to the business:
Expiring tax credits: Oppenheim writes, “Pulled-forward demand will likely lead to subsequent slowing starting in May. The concern is what happens after that.”
Rising mortgage rates.
Continuing foreclosures: “The continued supply of foreclosures will mute any improvement in demand,” Oppenheim wrote.
Tightened FHA standards: Oppenheim wrote that this would cut demand for new homes by 5 percent to 10 percent.
Unemployment: “People without jobs don’t buy homes,” Oppenheim wrote.

Source: The Wall Street Journal, Dawn Wotapka (02/12/2010)

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