28 November 2011 16:39 [Source: ICIS news]
In its monthly report, the department said that sales of new one-family homes last month were at a seasonally adjusted annual pace of 307,000, which represents an increase from the downwardly revised September figure of 303,000.
However, the September sales figure for new single-family homes was initially estimated at 313,000. Measured against that level, the October new home sales figure of 307,000 represents a decline of nearly 2%.
Although those data revisions muddy the waters for gauging the month-to-month health of the US housing sector, the department noted that October’s sales were nearly 9% better than the 282,000 units pace set in October 2010.
But here too, the improvement is relative. For while sales last month were markedly better than in October last year, the October 2011 sales pace of 307,000 is lower than activity seen in December 2010 (331,000) and January (310,000), April (316,000) and May (308,000) this year.
In the words of National Association of Home Builders (NAHB) chief economist David Crow, with sales of new single-family homes running in the 300,000-325,000 range and lower over the last year, the nation’s housing industry is only “running at idle”.
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 $15,000 (€11,250) worth of chemicals and derivatives used in the structure or in production of component materials.
The relative improvement in sales of new single-family homes for last month follows a report that home builders are slightly more confident about the near-term future for their industry, and data showing that sales of existing homes also rose marginally in October.
But the nation’s pace of mortgage loan foreclosures also rose in October, indicating that yet another wave of foreclosed residential properties will be flooding the housing market, driving down home prices and potentially chilling new home construction.
($1 = €0.75)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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