21 June 2012 18:44 [Source: ICIS news]
The association said that sales of existing homes in May were at a seasonally adjusted annual rate of 4.55m, down from the 4.62m pace recorded for April.
Sales of existing homes rose in February, fell in March, rebounded in April but have again turned south in May.
However, NAR chief economist Lawrence Yun said that May’s sales decline was not caused by weakening demand but rather a shortage of available homes in many parts of the country.
“The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand,” he said.
Despite a continuing flood of foreclosed residential properties on the market – and a new wave of foreclosures under way – NAR said that there is limited availability of existing homes at or below the entry level price range of $100,000 (€79,000).
NAR spokesman Walter Molony noted that a large number of homes may be in various stages of foreclosure, but that does not necessarily mean they are available for sale. He also said that the percentage of foreclosed properties among existing homes sales has declined steadily since 2008.
Yun also noted that over the last 11 months, existing home sales have been running well ahead of the same month in 2011.
He said that “The recovery is occurring despite excessively tight credit conditions and higher down-payment requirements, which are negating the impact of record high affordability”.
Although home prices in upper range properties have been rising slightly, entry-level property prices remain at historic lows, and
The housing market is a key downstream consuming sector for a wide variety of chemicals, resins and derivative products.
While new home construction is the principal consuming engine for chemicals in the housing sector, sales of existing homes are important because they take older residences off the market and help generate demand for new construction.
($1 = €0.79)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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