Most US consumers think buying a home is a bad investment

22 July 2011 19:46  [Source: ICIS news]

WASHINGTON (ICIS)--More than half of US consumers now think that buying a home is a bad family investment, a new survey reported on Friday, a finding that bodes ill for the nation’s long-depressed housing sector and supplier industries such as chemicals.

Polling firm Rasmussen Reports said that its survey of American adults found that only 43% of them “believe that buying a home is the best investment a family can make”.

That survey, conducted in mid-July, showed that consumer confidence in the housing market has fallen to an all-time low.

The same survey conducted in June showed that only 47% of polled adults believed that buying a family home is a good investment.

That 43% low-point is well below the pre-recession high of 73% and down considerably from the 60% confidence measure that was recorded as recently as September 2010, Rasmussen said.

“These findings come at a time when confidence that home values will improve has fallen to the lowest level ever recorded,” the survey firm said.

“For the second month in a row, less than half of America’s homeowners believe the value of their home is worth more than the amount they still owe on their mortgage,” Rasmussen added.

If public confidence in home ownership as an investment stays at such low levels, the long-struggling US home building sector may take years to recover and might never reach pre-recession scales.

That would be bad news for the home construction sector and for a wide variety of supplier industries.

The housing market is a key downstream consumer sector for the chemicals industry, driving demand for a wide variety of chemicals, resins and derivative 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 (€11,200) worth of chemicals and derivatives used in the structure or in production of component materials.

The Rasmussen survey followed a report that US existing home sales fell in June and that continuing tight credit conditions are hampering hopes for a housing recovery.

US Federal Reserve Board chairman Ben Bernanke recently expressed worries that the economic recovery could falter.

In contrast, however, US housing starts showed improvement in June and the nation’s home builders said they were slightly more confident of improving sales.

($1 = €0.70)

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy


By: Joe Kamalick
+1 713 525 2653



AddThis Social Bookmark Button

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

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index