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Housing starts in the U.S. declined in February to the slowest pace since April 2009 along with record low building permit applications, according to Bloomberg News.
New home construction fell nearly 23 percent to an annual rate of 479,000, the Commerce Department reported. Building permits also declined 8.2 percent to an all-time low pace of 517,000.
Geographically, starts dropped 49 percent drop in the Midwest, 38 percent in the Northeast, 28 percent in the West and 6.3 percent in the South. Building permits declined by 28 percent in the Northeast and by 14 percent in the West, the lowest numbers for both regions.
Construction of single-family houses decreased 12 percent to rate of 375,000 in February. Work on multifamily homes, such as townhouses and apartments, declined 46 percent to an annual rate of 104,000. Adding to the weak housing market recovery were foreclosed homes driving down prices and adding to inventories along with limited job growth. February foreclosures fell to their lowest levels in three years driven by pressures on lenders to process backlogged defaults and implement a new foreclosure system, but are forecast to rise about 20 percent to their peak during 2011, according to California-based RealtyTrac.
"At this point new homes are likely to continue to lose to existing homes because distressed properties pose a better bargain for buyers," said Millan Mulraine, senior US strategist at TD Securities in New York. "We're not seeing a strong rebound in the horizon because permit approval is just marginally above starts."