US sales of new single-family homes shoot up 7.6% in May

25 June 2012 16:03  [Source: ICIS news]

WASHINGTON (ICIS)--US sales of new single-family homes shot up by 7.6% in May from April, the Commerce Department said on Monday, more than doubling the 3.3% expansion seen in April and adding strength to hopes for a housing recovery.

In its monthly report, the department said that sales of new, single-family homes last month were at a seasonally adjusted annual pace of 369,000 compared with the April rate of 343,000.

The May sales pace also marked a 19.8% improvement on the May 2011 estimate of 308,000.

The 7.6% jump in May and April’s 3.3% gain appear to have halted what many economists had feared could be yet another slump in the long-troubled US housing market. 

Sales of new one-family homes had fallen nearly 1% in January, declined by 1.6% in February and then tumbled 7.3% in March.

The housing market – especially construction of single-family homes – 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 (€12,000) worth of chemicals and derivatives used in the structure or in production of component materials.

The department said that the seasonally adjusted estimate of new homes for sale at the end of May was 145,000, representing an inventory supply of 4.7 months at current sales rates.

That inventory figure, the lowest in more than a year, comes close to the 3- to 4-month supply of new homes for sale that would be considered normal in regular economic conditions.

In May last year the inventory of unsold new homes was a 6.6-month supply.

The May advance in new home sales follows other recent positive reports for the housing sector.

Construction of single-family homes rose in May, and US home builders reported increasing confidence in the housing market going forward.

($1 = €0.80)

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

By: Joe Kamalick
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