US new home sales began falling in 2005, when they peaked at 1.4 million a month. Last month, as the above chart from the ACC weekly report shows, they were down to just 337,000. Similarly, new home inventory has risen to 12 months. Each new home uses over $16k of chemicals, so this decline has had a major impact on industry sales.
But, at last, there are signs that the decline may be slowing:
• Existing home sales have been stable at c4.6 million since November
• Foreclosures have accounted for c40% of this volume
• Foreclosure prices are c20% below market, encouraging buyers
• The US Fed aims to cap interest rates via its ‘quantitative easing’ policy
Equally, spring is normally the peak time for sales. And after 4 years of constant decline, any relief, even temporary, would certainly be welcome.