The US housing market was worth $35bn a year in terms of chemical sales in 2006. In that Boom year, 2.2m homes were built, each using $16k of chemicals. But as the chart above shows, from the ACC's weekly report, there has been a steady decline since then.
The recent introduction of the $8000 first-time buyer tax credit may have helped to temporarily stabilise the housing market, but it hasn't led to a recovery. Starts actually fell in October to just 520k, worth just $8bn in terms of chemicals. Even in 1975, 1981 and 1991, starts only fell to 800k.
Worryingly, the delinquency rate on mortgages is still rising, reaching a record 9.6% in October, according to the Mortgage Bankers Association (MBA). And the pain of foreclosure is spreading from sub-prime loans to fixed-rate mortgages. These accounted for 44% of foreclosures in Q3.
The problem is rising and widespread unemployment. As Jay Brinkmann, the MBA chief economist told Barrons, "mortgages are paid with paychecks, not percentage point increases in GDP".