US housing starts rose 9% in June on apartments

17 July 2008 15:50  [Source: ICIS news]

WASHINGTON (ICIS news)--The pace of US new home construction rose by more than 9% in  June compared with May and builders’ applications for construction permits jumped 11.6%, the Department of Commerce said on Thursday.

 

However, much of that gain was attributed to strong growth in the multi-family housing sector. New construction of single-family homes, the mainstay of the housing market, continued to decline in June.

 

Overall, the number of housing starts in June rose 9.1% to a seasonally adjusted annual rate of 1.06m units and the volume of building permits issued for planned housing construction reached a seasonally adjusted annual rate of 1.09m, according to the department’s closely watched report on the residential market.

 

The home construction increase in June followed a 3.3% decline in May and an 8.2% jump in April. 

 

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.

 

The pace of new home construction in June was still nearly 27% below the rate of residential building work seen in the same month a year ago, and last month’s building permits were about 24% below activity in June 2007.

 

The seasonally adjusted and annualized figures for the number of housing starts, 1.06m, and the number of building permits, 1.09m, mark the first solid move into the 1m units range since January this year.

 

Much of June’s housing construction improvement was attributed to multi-family dwellings such as apartment buildings, which increased slightly more than 44% in June. Single-family home construction was down 3.5% in June.

 

The sharp increase in multi-family units also is seen as something of a negative sign for the core single-family housing market because it suggests that under now tighter mortgage loan policies, fewer families can enter home-owner ranks and instead are moving into the rental market in large numbers.

 

During the US home construction heyday of 2004-2006, the frenetic pace of new residential development edged above 2m units annually.  In addition, economists have generally regarded 1m new housing units per year as the new “floor” for the sector’s activity.

 

US Housing Starts

 

	June ‘08	May ‘08	May-June ‘08	June ‘07	June ’07 to June ‘08
US Housing Starts	1.06m*	.977m	9.1%	1.46m	-26.9%

* Seasonally adjusted & annualised

 

To discuss issues facing the chemical industry go to ICIS connect

By: Joe Kamalick
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly