Housing Market Looking Up (Accounting Today)

Ernst & Young survey reports optimism among homebuilders.

The single-family housing market is looking up, according an Ernst and Young survey of CFOs and tax directors. Almost 85% of respondents expected their companies to break even or better in 2012, up from 71% in 2011. In 2013, 95% expect to break even or have income gains. Home prices will increase in the next two years, according to a majority of those surveyed.

While many reported that their long term debt will not be due until after 2014, companies are still being conservative with their finances. Eighty-five percent had a target debt to capital ratio under 50%, and 74% of those are targeting a ratio of 36%-50% debt to total capitalization. The West Coast, Texas and Southeast will be home to the most profitable markets this year, respondents say.

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