16 June 2008 19:21 [Source: ICIS news]
HOUSTON (ICIS news)--US home builders' sentiment returned to a low of 18 in June, the National Association of Home Builders (NAHB) said on Monday.
As comparison, the NAHB/Wells Fargo June Housing Market Index reached a high of 72 in June 2005.
The weak performance of the nation's house market - along with the possibility of rising mortgage rates - could cause the NAHB to change its estimate of when it will recover, said David Seiders, chief economist. Before, he thought that house sales would bottom out in the first part of 2009.
"We are really scraping at the bottom of history at this time," Seiders said.
The US housing market represents one of the key end markets for a wide range of chemical products, such as polyvinyl chloride (PVC), paints and coatings, and other materials used in construction.
The NAHB/Wells Fargo June Housing Market Index had last reached 18 in December, Seiders said. However, it rose to 20 in February before it reached 19 in May.
US new house sales should continue falling in the months ahead, Seiders said.
"I keep thinking we will hit a bottom. However, builder numbers are still low," he said. "The risks are piling up on the downside."
One of the biggest risks to a housing recovery is rising mortgages rates, Seiders said. The increase reflects expectations that the Federal Reserve (Fed) will start increasing rates to address inflation.
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