PrintWASHINGTON (ICIS news)--The US housing industry will improve in 2010 as the availability of cheap loans, federal stimulus efforts, low materials costs and pent-up demand restore new home construction, a top sector economist said on Thursday.
However, that improving outlook for the crucial US home building industry represents a fallback from earlier and more optimistic forecasts.
David Crowe, chief economist at the [1]National Association of Home Builders (NAHB), said that new single-family home sales for this year will likely bottom out at around 364,000 units or 24% below 2008 sales.
At their peak during the housing boom years of 2003-2006, sales of new single-family homes worked up to about 1.3m units/year.
However, Crowe said he expects new home sales next year to grow nearly 50% compared with this year's anticipated low-point to reach 539,000 units.
The US housing market, especially new home construction, is a key downstream consuming sector for the nation's chemicals manufacturers because it drives demand for a broad range of chemicals and derivative products such as insulation, plastic pipe, synthetic fibres, roofing materials, adhesives and many others.
Speaking on Thursday at the [2]association's semi-annual housing forecast conference, Crowe said the housing sector will recover because of a combination of market trends and federal policies.
He cited record-low mortgage loan rates, "significant" federal stimulus efforts on the broad economy and [3]in the housing sector specifically, policies to reduce home foreclosures and "strong pent-up demand".
Crowe also cited monetary accommodation policies, falling prices for home construction materials and "very, very small positive signs in consumer spending, incomes and stock market indexes".
However, at the association's earlier housing forecast conference in October 2008, then chief economist David Seiders had anticipated [4]an upturn in new home construction early this year.
New home construction has [5]generally been down since the start of this year except for a [6]brief upturn in February. That February upturn was attributed largely to increased construction of multi-family apartment buildings in response to [7]rising demand for rental units as families are forced out of foreclosed homes.
Seiders, who retired as the association's top economist, also had forecast in October that US construction of new single-family homes would climb back to 900,000 units in 2010 - a figure now reduced by about half in Crowe's outlook.
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References
1. http://www.nahb.org / 2. http://www.nahb.org/conference_details.aspx?conferenceID=44§ionID=121 3. file://localhost/home/cni/cnistories/Articles/2009/02/18/9193837/Obama-announces-200bn-housing-sector-rescue-plan.html 4. file://localhost/home/cni/cnistories/Articles/2008/10/22/9165633/US-builders-group-forecasts-2009-housing-recovery.html 5. file://localhost/home/cni/cnistories/Articles/2009/04/16/9208731/US-housing-starts-fall-to-second-lowest-rate-in-50-years.html 6. file://localhost/home/cni/cnistories/Articles/2009/03/17/9200963/us-new-home-construction-up-sharply-in-february.html 7. file://localhost/home/cni/cnistories/Articles/2009/03/19/9201441/insight-us-housing-improves-but-is-it-a-good-thing.html 8. http://www.icis.com/icisconnect 9. http://www.icis.com/blogs/chemicals-and-the-economy/