Fitch Ratings upgraded M/I Homes Inc.'s long-term issuer default rating to BB- from B+ and changed the homebuilder's rating outlook to stable from positive.
The rating agency also affirmed the company's senior unsecured notes and unsecured revolver at BB- while revising the recovery ratings to RR4 from RR3.
Fitch attributed the ratings to M/I Homes' stable credit metrics, conservative land policies, healthy liquidity position and how the company carried out its business model in the current housing landscape. It lauded the company on how it handles land and development expenses.
The rating agency, however, argued that M/I Homes' somewhat restricted geographic diversity and high speculative inventory levels relative to its homebuilding peers, as well as the cyclical nature of the homebuilding sector could pose risks.