US existing home sales fell sharply in March

24 April 2007 18:35  [Source: ICIS news]

WASHINGTON (ICIS news)--US sales of existing homes fell off sharply in March by 8.4% to a seasonally adjusted annual rate of 6.12m units against February’s 6.68m homes sold, with market leaders blaming bad weather and tighter credit, according to data released on Tuesday.

 

The housing market is a key downstream consumer sector for the chemicals industry, driving demand for a wide variety of chemicals and chemicals-based products such as plastic pipe, insulation, paints and coatings, adhesives and synthetic fibres, among many others.

 

New home construction is the more important segment of the market for chemicals, but existing home sales also account for chemical products consumption through redecorating and new furnishings that frequently are triggered in preparing existing homes for market or in after-sale home improvements by new owners. 

 

The existing home market also is much larger than new home construction, with 6-7m existing homes sold annually compared with 1-2m new homes built each year.

 

The National Association of Realtors (NAR) chief economist David Lereah said the sharp decline in March home sales was expected.  He said existing home sales last month reflect the impact of unusually poor weather in February and the tightening of mortgage loan availability for home buyers seen as poor risks, so-called sub-prime borrowers.

 

Taking a broader perspective, Lereah noted that existing home sales for the first quarter this year, an average of 6.41m units, were slightly higher than the sales pace seen during the second half of 2006.

 

“We’re still looking for existing home sales to gradually improve during the last half of 2007,” Lereah said.

By: Joe Kamalick
+1 713 525 2653

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