Financial markets have been buoyant in recent weeks, as I noted recently. But this is at odds with actual newsflow. The chart above, from Kevin Swift’s excellent weekly report for the American Chemistry Council, highlights once again the dire state of US housing.
March should be a buoyant month for house sales. Yet existing home sales fell 2% versus February, and were 19% down versus March last year. New home sales were even worse, down 8.5% versus February and a massive 37% versus last year. Inventories also rose sharply. There is now a 9.9 month supply of existing homes, due to a growing number of foreclosures. Inventory of new homes is now at a 30 year high of 11 months.
Housing is of critical importance to chemical industry sales. In spite of the optimism at NPRA, this data signals that there seems little chance of any meaningful improvement in US housing this year. US manufacturers will continue to have to rely on exports, and the weaker US$, to help them compensate for slow domestic markets.