US Feb sales of new single-family homes drop 1.6% after Jan fall

23 March 2012 17:11  [Source: ICIS news]

WASHINGTON (ICIS)--US sales of new single-family homes fell by 1.6% in February from January, the Commerce Department said on Friday, and followed a 0.9% drop in January to mark a second straight month of declines.

Sales of new single-family homes had been trending up in the last four months of 2011.

In its monthly report, the department said that sales of new single-family homes in February were at a seasonally adjusted annual pace of 313,000 units, a 1.6% decline from the downwardly revised January figure of 318,000. January’s total originally had been estimated at 321,000.

While February’s numbers were down, the department noted that last month’s pace of new single-family home sales was 11.4% ahead of the same month a year earlier.

Despite the year-on-year gain, the pace of new home sales remains in the doldrums.

With sales of new single-family homes running in the 300,000 to 325,000 units range, the nation’s housing construction industry is said to be “running at idle”, in the words of National Association of Home Builders (NAHB) chief economist David Crow.

The annualised pace of 313,000 units sold in February stands in stark contrast to the housing boom years of 2003-2006 when new single-family homes were selling at an annual rate of around 1.2m units – almost four times the current level.

Without a strong revival in the housing sector, top US policymakers worry that the nation's overall economic recovery will continue to be only modest.

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 $15,000 (€11,400) worth of chemicals and derivatives used in the structure or in production of component materials.

The downturn in new home sales for last month comes in the wake of a 1.1% decline in housing starts reported for February, including a sharp 9.9% drop in new construction of single-family homes.

However, the overall new home sales data does show promise in some areas of the nation, according to the department.

Sales of new single-family homes last month rose by more than 14% in the northeast and by 8% in the west, although those gains were not enough to offset a 2.4% decline in the midwest and a sharper 7.2% fall in the south.

($1 = €0.76)

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