20 December 2012 19:59 [Source: ICIS news]
WASHINGTON (ICIS)--US sales of existing homes rose by 5.9% in November from October, and the nation’s housing industry is on course for slow but steady growth in 2013, two industry reports said on Thursday.
The National Association of Realtors (NAR) said that sales of existing homes last month were at a seasonally adjusted annual rate of 5.04m, up from the downwardly revised 4.76m figure for October.
Existing home sales in November also were running 14.5% ahead of the same month last year, and sales activity is at its highest level since November 2009, NAR said.
NAR chief economist Lawrence Yun said that there is “healthy market demand”, citing the improving US employment picture and a new surge in household formations.
Household formations is the term for when young people leave their parental homes, join the workforce and either buy a home or rent an apartment.
During the 2008-2009 recession and the long-lingering high unemployment rate since then, many young people were obliged to live at home or double up with roommates.
Now, according to NAR, more and more of those youngsters (many in their late 20s) are moving into the housing market for the first time.
“With rental rates rising, combined with still historically favourable affordability conditions,” Yun said, referring to low housing prices and mortgage rates, “more people are buying houses.”
David Crowe, chief economists at the National Association of Home Builders (NAHB), also cited recent housing indicators that “point to a slow and steady growth in the nation’s housing market in 2013”.
Crowe said noted that recent data on housing starts, building permits issued, home prices and sales and builder confidence levels all indicate that “a gradual but steady housing recovery is under way across much of the nation”.
Yun also reported that the inventory of existing homes for sale fell by 3.8% in November from October to 2.03m units. At the current sales pace, that represents a 4.8-month supply, which is near normal.
It also is the lowest housing inventory since September 2005 – during the height of the US housing boom – when it was 4.6 months.
Crowe cautioned, however, that the housing recovery could be sidetracked.
“Stubbornly tight lending standards for home buyers and builders, inaccurate appraisals and proposals by policymakers to tamper with the mortgage interest deduction could dampen future housing demand,” he said.
The US housing industry, especially new home construction, is a key downstream consuming sector for a wide variety of chemicals, resins and derivative products.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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