US housing starts 74% below 2006 peak

US house Feb10.jpg15% of Americans were either in foreclosure, or at least one payment overdue, according to the Q4 Mortgage Bankers Association survey. This is a record high, but the MBA sees some signs that the numbers may have peaked. It is concerned, however, over the rise in the number of long-term unemployed, now a record 40% of total unemployed.

US housing was a $35bn market for chemicals as recently as 2006, when housing starts ran at a 2.2 million rate. They are now 74% below that level. January’s figures showed some sign of a bottoming, but were still just 591k. One sign of the current crisis is that, as shown in the above chart from thechartstore.com, they need to rise c35%, just to get back to the lowest level ever seen in the period 1959-2008.

Update: In later news today, the S&P Case-Shiller Index of house prices fell 3.1% versus December 2008. 11.3 million US households are now in negative equity (where the house is worth less than the mortgage). This equals 24% of all US properties with mortgages.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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