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Housing report lifts mood at HIRI conference

Chicago – The Home Improvement Research Institute (HIRI) Fall Conference kicked off just a few minutes after the Commerce Department released data showing a 15% increase in September housing starts

It was comforting news to the industry in general. It was also a particular relief to presenter Joshua Rosenbaum of UBS. “It means I don’t have to redo my presentation,” said Rosenbaum, managing director of UBS’s Global Industrial Group, about the seasonally adjusted annual rate of 872,000.

Rosenbaum described a relatively clear path to the million starts level, and pointed out that 2013 housing starts forecasts from 10 different firms range from 1.1 million on the high end to 0.8 million on the low end.  The average forecast for 2013 was 924,000.

Returning to the historical average pace of about 1.5 million starts would require a significant improvement in the nation’s employment situation, he cautioned. 

Rosenbaum’s presentation here, "The U.S. Economic Backdrop for Home Improvement," pointed to renewed interest in the home improvement sector by Wall Street. “Investors are very excited about the home improvement sector,” he said. “It’s happening.” He established the point by showing significant growth in the last year of price-per-earnings ratios for building product retailers and building product manufacturers. Respectively, the median P/E ratios increased from 11.6 to 20.3; and from 12.1 to 22.6.

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