US home sales fell in Jan, more homes on market

25 February 2008 18:27  [Source: ICIS news]

WASHINGTON (ICIS news)--US sales of existing homes fell by 0.4% in January and the housing market faces an increasing overstock of dwellings for sale, the National Association of Realtors (NAR) said on Monday.

 

The Realtors group said that sales of existing homes last month fell to a seasonally adjusted annual rate of 4.89m units, down from the annualised selling rate of 4.91m seen in December.

 

Compared with January 2007, last month’s existing home sales were 23.4% lower, the association said.

 

The US housing sector, especially new home construction, is a key downstream consumer of chemicals and chemical-based products such as roofing and siding materials, paints and coatings, adhesives, plastic pipe and synthetic fibres, among many others.

 

However, even sales of existing homes help drive chemicals consumption in remodelling done before and after homes change hands. The existing home sales market, which reached 6m units annually during the 2003-2005 housing boom, also is much larger than the new home market of around 1m unit sales annually.

 

In addition the dip in sales, the number of existing homes on the market continues to increase, NAR said, suggesting that the US housing market decline still has some downward distance to cover before a recovery can begin.

 

The association said that total US housing inventory - which includes single-family homes and condominiums - rose 5.5% in January to 4.19m units, which represents a 10.3-month supply of dwellings at current sales rates. The inventory had been 9.7m homes in December.

 

In a more normal economic environment, the US would have no more than a 6-month supply of homes for sale.

 

NAR President Richard Gaylord expressed hope that expected easing of home loan borrowing ceilings by Congress and federal regulators will bring some relief to the housing sector by midyear.

 

“Once buyers have greater access to higher loan limits, it will take a few months for increased shopping activity to translate into higher sales,” he said.  “But we should see some movement of pent-up demand by this summer.”

By: Joe Kamalick
+1 713 525 2653

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