US house prices, building permits, see record declines

Housing permits May09.jpgUS house prices are still seeing “record declines” according to today’s Case-Shiller home price index. The national price was down 19.1% from March 2008, and 32% from the Q2 2006 peak. As before, the over-built Sunbelt led the way, with Phoenix, Arizona down 36% from last year. But now, the index is picking up major weakness in Detroit (down 5% in just one month) and New York (down 3%), as unemployment rises.
Equally, the figures for building permits show no sign of any green shoots. These are a key indicator for future chemical demand, with each new house using $16k of product. As the above chart from Ron Griess of shows, permits to build new homes are now at their lowest level since records began 1960, and down 50% on last year.
At their peak, housing starts were 2.2m/year, worth c$35bn of chemical sales. In April, only 458k homes were started, worth just $7bn, and only 494k permits were issued. Yet Q2 is normally the peak season for construction. The blog fears Q4 may have worse surprises in store, if unemployment rises and loans remain hard to obtain.

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