OREANDA-NEWS. Robust advances in U.S. starts and new home sales should enable public homebuilders to report meaningfully higher revenues, on average, in the coming year, according to Fitch Ratings in its 2016 Outlook report for the sector. A few builders may position for positive ratings actions during the coming year.

Housing should benefit from a solidly expanding economy in 2016. 'As by-products of a smoothly growing economy, interest rates should rise, but employment should show moderate gains and consumer confidence is expected to improve,' said Managing Director Bob Curran. 'The spring selling season will once again likely set the tone for the year.'

'The likelihood of higher home deliveries could position housing revenue to jump by 10%-13% next year,' said Curran. Fitch also projects home prices to rise by 3.0%-3.5% in 2016. Fitch anticipates land and development spending to be flattish to moderately higher next year. As in 2015, a majority of the land sourced will be raw or partially developed.

Also improving the outlook for homebuilders will be foreclosures, which are expected to further decline with fewer 'underwater' mortgages, and continued loosening credit standards, especially for first time buyers. 'New home pricing will benefit from still-restrained levels of new home inventory, though home price increases should level off to the low single digits,' said Curran.