In its second report on the potentially defective building materials, the Consumer Product Safety Commission said its investigation also has found a "possible" link between health problems reported by homeowners and hydrogen sulfide gas emitted from the wallboard coupled with formaldehyde, which is commonly found in new houses.
The agency, along with the Environmental Protection Agency and the Centers for Disease Control and Prevention, continues to study the potential health effects, and the long-term implications of the corrosion.
The commission said it can now move forward with additional studies to identify effective remediation of the problem and potential assistance from the federal government in fixing it.
The agency has spent $3.5 million on the studies, and has received more than 2,000 homeowner complaints from 32 states, Washington, D.C., and Puerto Rico, in one of its largest consumer product investigations in U.S. history.
The commission released its first report on the drywall last month, noting before it could consider a recall, ban or other action.
Thousands of homeowners who bought new houses built with the imported Chinese building product are finding their lives in limbo as hundreds of lawsuits against builders, contractors, suppliers and manufacturers wind through the courts.
During the height of the U.S. housing boom, with building materials in short supply, American construction companies imported millions of pounds of Chinese-made drywall because it was abundant and cheap. An Associated Press analysis of shipping records found that more than 500 million pounds of Chinese gypsum board was imported between 2004 and 2008 - enough to have built tens of thousands of homes.
They are heavily concentrated in the Southeast, especially Florida and areas of Louisiana and Mississippi hit hard by Hurricane Katrina.
The suspect building materials have previously been found by state and federal agencies to emit "volatile sulfur compounds." Officials have also found traces of strontium sulfide, which can produce a rotten-egg odor, along with organic compounds not found in American-made drywall. Homeowners complain the fumes are corroding copper pipes, destroying TVs and air conditioners, blackening jewelry and silverware, and making them sick.
The federal government says China is assisting with the investigation.