US Sept new house sales rise slightly over Aug

27 October 2008 16:37  [Source: ICIS news]

HOUSTON (ICIS news)--The number of US new houses sold in September rose 2.7% month over month, but the small increase did little to improve the outlook for the nation's troubled housing market, according to statistics released on Monday by the US Department of Commerce.

Houses are an important end market for chemicals, in that each house has an average of $16,000 (€12,800) worth of chemicals, according to the American Chemistry Council (ACC). Housing chemicals include paints and coatings, adhesives, fibres and polyvinyl chloride (PVC).

The US housing market is in a multi-year slump, which has lowered demand for many chemicals. The sales statistics for September indicate that demand will not likely improve.

Once adjusted for seasonal fluctuations, September house sales reached a rate of 464,000/month, the department said. Although sales improved slightly over August, they were down 33.1% when compared with September 2007.

Moreover, the US still had a 10.4 month supply of new houses in September, indicating an oversupply. A housing market is in equilibrium when it has enough houses to last six months.

In another bad sign for the nation's housing market, median sales prices continue to drop. The median for September was $218,400, down 9% from $240,300, the median for September 2007, according to the department.

On Friday, the ACC said a similar September upswing in existing US home sales was likely to be short-lived.

($1 = €0.80)

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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By: Al Greenwood
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