26 May 2010 19:56 [Source: ICIS news]
WASHINGTON (ICIS news)--US sales of new single-family homes shot up by nearly 15% in April, the Commerce Department said on Wednesday, apparently reflecting the final rush of home buyers taking advantage of a federal tax credit that expired last month.
In its monthly report, the department said that sales of one-family homes were at a seasonally adjusted annual rate of 504,000 units in April, representing an advance of 14.8% from the March rate of 439,000 homes.
The April selling rate for new homes also marked the highest level of activity since the 504,000-unit pace last seen in May 2008. Moreover, the rate was nearly 50% better than single-family home sales in April 2009.
Analysts said all three measures of activity in the crucial ?xml:namespace>
That credit was available to those who purchased a residence before the end of April when the programme concluded.
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 American Chemistry Council (ACC) estimates that each new home built represents some $16,000 worth of chemicals and derivatives used in the structure or in production of component materials.
With the federal tax credit incentive now ended, analysts would be watching housing data results for May, June and July - usually peak months for home sales - to see if the housing market had enough fundamental strength to continue growth without the federal stimulus.
Even housing industry economists expected that the sector may see a dip in new home construction and sales of existing homes this month and next, in part because sales made in April during the final weeks of the tax credit probably pulled in buyers who otherwise might have made their purchases in May, June or July.
April also saw a sharp decline in building permits, indicating that home builders expected a near-term drop in housing demand.
The National Association of Home Builders expected that the housing sector would continue its recovery in the second half this year, even if there was a dip in activity in the first few months after the tax credit lapsed.
But economists warned that the housing recovery was still tentative and could be shaken if US employment figures failed to show much improvement during the second half or if the ongoing credit crisis in Europe triggered a double-dip recession there that also could depress the
($1 = €0.81)
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