U.S. Municipal Housing 2019 Sector Outlook: Stable For Now

Source: S&P Global Ratings, January 23, 2019
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S&P Global Ratings’ 2019 outlook for the U.S. public finance (USPF) housing sector is stable, with a few exceptions in certain subsectors. The outlook reflects stronger financial metrics, including asset growth, revenue diversification, and resilient strategy and management in most of the sector. We expect housing issuance volume to continue increasing this year as housing finance agencies (HFAs) expand their issuance of mortgage revenue bonds and more community development financial institutions (CDFIs) and public housing authorities (PHAs) enter the public markets. While S&P Global Ratings forecasts slower economic growth in 2019, last year ended with positive employment information. The combined strength of jobs, number of hours worked, and wages points to a strong income gain to end the year. Adding to that, the continued rise in the labor force participation rate of prime-age workers suggests that there is potentially more room to expand.