US January builder confidence holds at six-year high

16 January 2013 22:58  [Source: ICIS news]

HOUSTON (ICIS)--US builder confidence for new, single-family homes held steady in January, remaining at its highest level since April 2006, the National Association of Home Builders (NAHB) said on Wednesday.

The NAHB/Wells Fargo Housing Market Index (HMI) was unchanged at 47, and components of the index were mixed. The gauge of current sales conditions remained at 51, while the component gauging sales expectations for the next six months fell a point to 49. The component gauging traffic of prospective buyers gained a point to 37.

"Conditions in the housing market look much better now than at the beginning of 2012, and an increasing number of housing markets are showing signs of recovery, which should bode well for future home sales later this year," said Barry Rutenberg, chairman of the NAHB and a home builder from Gainesville, Florida.

Uncertainties in regard to the federal government’s fiscal cliff negotiations dragged on builder confidence, and the future of the mortgage interest deduction could add to the worries in the near future, Rutenberg said.

NAHB Chief Economist David Crowe concurred. “Persistently tight mortgage credit conditions, difficulties in obtaining accurate appraisals and the ongoing stalemate in Washington over critical economic concerns continue to impede the housing recovery,” he said.

The HMI three-month moving average showed gains across all regions, with the west posting a four-point increase to 51 and the South logging a three-point gain to 49. The northeast and midwest posted two-point gains to 36 and 50, respectively.

The housing market 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, roofing materials and synthetic fibres.

The American Chemistry Council (ACC) estimates that each new home built represents some $15,000 (€11,250) in chemicals and derivatives used in the structure or in production of component materials.

($1 = €0.75)

By: Jeremy Pafford
+1 713 525 2653

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