Construction of new homes fell sharply last month, and foreclosures surged in the first quarter, according to reports released on Thursday, signaling a still-struggling housing market.
The government reported that new home starts fell 10.8 percent in March from February, just a month after a spike in new-home construction raised hopes that the country’s housing market was beginning to make a comeback as credit conditions eased.
Home construction in March fell to an annual rate of 510,000 units, the Commerce Department reported, less than expectations by economists of 540,000 units. It was the second-lowest level on record and 48.4 percent lower than housing starts in March 2008.
“There’s still no clear indication that the construction market is coming back,†said Mike Larson, a housing analyst at Weiss Research. “Even if companies want to start projects, they’re having a harder time getting the money to do so. We’re being overwhelmed by distressed inventory as well as regular sellers trying to get out of their homes. There’s not a heck of a lot of incentive for builders to ramp up construction.â€
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