US new home sales remain at record-low levels in August

24 September 2010 16:39  [Source: ICIS news]

WASHINGTON (ICIS)--US sales of new single-family homes remained at record-low levels in August compared with July, the Department of Commerce (DOC) said on Friday, with the pace of selling unchanged from the previous month and nearly 29% below year-ago figures.

In its monthly report, the department said that sales of new one-family residences were at a seasonally-adjusted annual rate of 288,000 units in August, exactly even with the revised sales figure of 288,000 for July.

In its initial report on July’s new home sales, the department had estimated a selling pace of 276,000 units.

The department also reported that there were an estimated 206,000 new but unsold single-family homes on the market during August, representing an 8.6-month supply at current selling rates.

The inventory of unsold new homes was little changed from the revised 8.7-month supply that was available in July, according to the department’s data.

During normal economic times, the inventory of unsold new one-family residences would show around a four-month supply.

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 (€12,000) worth of chemicals and derivatives used in the structure or in production of component materials.

The department’s report of a continuing record-low level of new home sales came as US home builders expressed little hope of a near-term turnaround in the long-struggling housing market.

But the housing industry did get some good news on Thursday, when the National Association of Realtors reported a 7.6% gain in August for sales of existing homes.

However, that advance was in part a reflection of how far the existing home market has fallen, with July’s sales pace at a 15-year record low and real estate officials saying the sector is not likely to improve significantly until US unemployment figures are reduced.

($1 = €0.75)

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By: Joe Kamalick
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