US housing starts rise 12.1% in December

17 January 2013 18:09  [Source: ICIS news]

US housing starts up 12.1% in DecemberHOUSTON (ICIS)--US new home production in December 2012 reached its highest level since June 2008, according to data released on Thursday from the Commerce Department.

Substantial gains in single-family and multifamily housing production led to housing starts increasing 12.1% nationwide to a seasonally adjusted annual rate of 954,000 units in December, the Commerce Department said.

"Builders have become increasingly optimistic about conditions in local housing markets in recent months, and this report underscores that the housing recovery is well on its way," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Florida. "With inventories of new homes at razor-thin levels, builders are moving prudently to break ground on new construction ahead of the spring buying season to meet increasing demand."

"Overall, this report represents a solid ending to 2012 and a promising start to 2013," said NAHB senior economist Robert Denk. "Multifamily production is almost back to normal levels, and while single-family starts still have a way to go, they are gaining momentum.”

In December, single-family housing starts increased 8.1% to a seasonally adjusted annual rate of 616,000 units, while multifamily production jumped 23.1% to 338,000 units.

Single-family and multifamily starts activity was up across all regions. The northeast posted a gain of 21.4%, the midwest was up 24.7%, the south reported a 3.8 % increase and the west was up 18.7%.

Permit issuance held virtually steady at a 903,000-unit rate in December. Single-family permits rose for a fourth consecutive month, by 1.8% to 578,000 units, while multifamily permits declined 2.1% to 325,000 units.

Regionally, permits were up 19% in the northeast and 6.6% in the west, while the south and midwest posted declines of 3.4% and 5.7%, 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, among many others.

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

Building permits are issued by local governments when contractors are ready to break ground and begin construction of a residential structure, so monthly permitting data are seen as a real-time indicator of the housing sector’s near-term prospects.

($1 = €0.75)

By: Jeremy Pafford
+1 713 525 2653

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