US home building rises 1.5% in Jan, but one-family units fall 1%

16 February 2012 14:34  [Source: ICIS news]

WASHINGTON (ICIS)--US new home construction rose by 1.5% in January from December, the Commerce Department said on Thursday, but the total gain was made in rental apartment units, with the core single-family building sector falling by 1%.

In its monthly report, the department said that the number of housing starts in January was at a seasonally adjusted annual pace of 699,000, an improvement from December’s upwardly revised rate of 689,000 units (originally estimated at 657,000).

However, January’s improvement in new residential construction activity was wholly attributed to a 14.4% jump in work on multi-family rental apartment units, while housing starts in the core single-family home market fell 1% from December.

Economists see sharp gains in apartment construction as an indirect sign of ongoing troubles in the housing market. As home foreclosures continue at a high pace, families who lose their homes typically move into rental units, driving demand for new apartments.  

Housing construction 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, roofing materials and synthetic fibres, among many others.

The American Chemistry Council (ACC) estimates that each new home built represents some $15,000 (€11,400) worth of chemicals and derivatives used in the structure or in production of component materials.

But there may be better news ahead for the single-family housing sector.

The department said that building permits issued in January were at a seasonally adjusted annual rate of 676,000, which is 0.7% ahead of the pace seen in December.

Within that overall total for housing permits, new applications for construction of single-family homes were up by 0.9% from December.

Building permits are issued by local governments when contractors are ready to break ground and begin construction of a residential structure, so monthly permitting data are seen as a real-time indicator of the housing sector’s near-term prospects.

US Housing Starts


Jan ’12

Dec ’11

Jan ’12 - Dec ’11

Jan ’11

Jan ’11 - Jan ’12

US Housing Starts






* Seasonally adjusted & annualised

($1 = €0.76)

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