25 July 2012 16:16 [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 350,000, down by 8.4% from the upwardly revised May figure of 382,000. The original May estimate was for 369,000 units sold.
Although down sharply from May, the June pace of new home sales was 15% higher than the same month of 2011, suggesting that despite its recent ups and downs, the market for new homes is on average better than last year.
So far this year, new home sales have been on a bumpy statistical road, falling by more than 1% in both January and February, then tumbling by 7.3% in March.
New home sales turned up again in April with a 3.3% advance, followed by the even stronger 7.3% gain in May.15
Market observers will be watching to see if the sharp drop in June will be a one-month blip or be followed by another decline in July.
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 (€12,450) worth of chemicals and derivatives used in the structure or in production of component materials.
The June sales decline also means that the inventory of unsold new homes rose in the month, climbing by 8.9% to reach a 4.9-month supply at current sales rates.
The inventory of unsold new homes had dropped to a 4.5-month supply in May, the lowest level in a year. In July last year the inventory was at a 6.7-month level.
($1 = €0.83)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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