The US housing construction sector expects home building will gradually improve this year and next, a top analyst said on Thursday, perhaps reaching a level of development equal to half of what the market was in the 1990s.
In its mid-year housing market outlook, the National Association of Home Builders (NAHB) said that while the still-struggling US economic recovery is less than might have been hoped for, “it does lay the groundwork for an improving housing market”.
NAHB chief economist David Crowe told a teleconference that he expects construction of new single-family homes this year will reach 519,000, which would mark an upturn from the record low of 434,000 new one-family residences built in 2011.
He also forecast that new single-family home construction will grow to some 668,000 units in 2013.
But even if the long-suffering housing market has finally begun to recover, he said it will be a slow climb, plagued by continuing high US unemployment rates, only modest household income growth and tight credit, among other issues.
Even if the US new home construction sector reaches 519,000 units this year, that will be only 41% of the annual average of 1.25m single-family homes built in the period 1995-2003.
And that projected pace of new home construction for this year would be less than one-quarter of the annual average of approximately 2m new single-family homes that were built in the housing boom years of late 2003 through 2005 and into early 2006.
If new single-family home construction does reach 668,000 units next year, that will amount to 53% of the 1995-2003 annual average but would still be only about a third of the boom years pace.
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 some $15,000 (€12,300) worth of chemicals and derivatives used in the structure or in production of component materials.