US housing starts hit new low in January

18 February 2009 14:58  [Source: ICIS news]

WASHINGTON (ICIS news)--US new home construction fell to an all-time low in January with only 466,000 residential projects initiated on a seasonally adjusted annual basis, fully 56% below January 2008, the Commerce Department said on Wednesday.

Data on the new low in US residential construction came just hours before President Barack Obama was scheduled to announce a housing sector rescue plan.

Sources said that Obama will launch a federal funding programme that will reward banks and mortgage loan holders for making payment and loan balance adjustments for homeowners at risk of foreclosure.

The department said that January’s pace of new home construction also was nearly 17% below the rate seen in December when some 560,000 new housing projects were initiated, also on a seasonally adjusted annual basis.

The decline in housing in January marked the seventh straight month of freefall in new home construction.

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 department also reported that building permits issued in January were at a seasonally adjusted annual number of 521,000, which is 4.8% below the December rate of 547,000 and 50.5% below the January 2008 figure of 1.05m permits.

Building permits are issued by local governments when contractors are ready to begin work on new residential construction - single family homes or multi-unit apartment buildings.

Because building permits indicate near-term plans by housing contractors, January’s decline in the number of construction authorisations suggests that the long-troubled home building sector is set to decline still further.

US Housing Starts

	Jan ’09	Dec ’08	Dec ’08 to Jan ’09	Jan ’08	Jan ’08 to Jan ’09
US Housing Starts	.466m*	.560m*	-16,8%	1.06m*	-56.2%

* Seasonally adjusted & annualised

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