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US housing remains weak as foreclosures rise

Chemical companies, Consumer demand, Economic growth, Financial Events, Leverage
By Paul Hodges on 25-May-2010

US housing May10.pngThe problems in US housing remain a major cause of concern for global chemical markets. As the above chart shows – from the American Chemistry Council (ACC) weekly report – housing starts (blue line) and building permits (red) are still at very low levels.

April’s housing starts were up 41% versus 2009 to 672k. And this was the highest monthly figure since the Crisis began in October 2008. But they were still 15% lower than seen in any previous downturn, since records began in 1959. And building permits were down 12% versus March, as contractors foresaw a slower market now the $8k tax credit has expired.

Equally, as the Mortgage Bankers Association reported:

• 14% of all households with a loan are at least one payment overdue
• 4.63% of all loans are in foreclosure, up from 3.85% in Q1 2009
• States such as Illinois and Michigan are now seeing the highest increase in seriously overdue payments, as their local economy hits problems.

As the ACC note, “the housing sector is recovering slowly, but remains depressed as foreclosures continue to saturate the market“.