US sales of new one-family homes rise 7.9% in Aug from July

25 September 2013 16:53 Source:ICIS News

WASHINGTON (ICIS)--US sales of new single-family homes rose by 7.9% in August from July, the Commerce Department said on Wednesday, a gain that in part offsets the sharp 13.4% decline in one-family housing construction seen in July.

In its monthly report, the department said that sales of new single-family homes last month were at a seasonally adjusted annual rate of 421,000, a gain of nearly 8% from the downwardly revised July figure of 390,000 units.

The number of new home sales in July originally had been estimated at 394,000, seasonally adjusted and annualised.

In addition, the August pace of new home sales was a solid 12.6% ahead of the same month in 2012, suggesting that despite the market’s ups and downs, the housing recovery appears to be ongoing.

Regional activity varied widely within the August data.

While sales of new one-family homes shot up by 19.6% in the Midwest last month, sales plummeted by nearly 15% in the West.

The western US, home to many of the states hardest hit by the housing market collapse, is struggling to get onboard with the home building recovery. 

Unlike the overall year-on-year advance in new home sales for the nation as a whole, sales of new one-family homes in the West are still running more than 21% behind the pace reported in August 2012.

The report also noted that the number of new one-family homes available on the market last month was 175,000 (seasonally adjusted), which represents a five-month supply at current sales rates.

Construction and sale of new single-family homes is the core segment of the US housing market.

That 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 (€11,100) in chemicals and derivatives used in the structure or in production of component materials, equipment and furnishings.

($1 = €0.74)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By Joe Kamalick