Fitch: Positive signs emerge in U.S. housing

Fitch Ratings said that although U.S. housing continues its steep cyclical decline and it looks likely that the housing contraction will extend through 2008, a few positive signs have emerged.

"Continued low mortgages rates, some improvement in affordability, proposed government support for beleaguered mortgage holders and the economic stimulus program may signal a possible step in the right direction for U.S. housing," managing director and lead homebuilding analyst Bob Curran said in an agency statement.

"That said, a modest recession, declining home prices, tighter mortgage standards even for conventional loans, poor buyer psychology and record levels of new and existing homes for sale will continue to define the current environment for housing."

Typically, homebuilders' operating and financial performances were quite weak in the fourth quarter, a pattern that Fitch said is likely to be replicated in first-quarter results.

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