NEW YORK (CNNMoney) — After a strong start to the year, home builders have pared back, according to a report from the Census Bureau.
The number of new homes that began construction in March fell 5.8% to an annualized rate of 654,000 compared with February, the bureau said Tuesday. Housing starts were up year over year, however, by 10.3%.
The decline in starts represented a “pause in what had been a fairly rapid build-up in builder confidence that started last September,” said David Crowe, chief economist for the National Association of Home Builders.
He cited two factors contributing to the slowdown: competition from foreclosures and tight credit conditions that made it difficult for builders to get construction loans and homebuyers to get mortgages.
The results fell short of analyst expectations. A panel of experts from Briefing.com had forecast that starts would clock in at 700,000.
The report contained some good news. Housing permits, a more forward loooking market indicator, grew 4.5% in March to a 747,000 annual rate, compared with a month earlier. They were up 30.1% year over year.
™ & © 2012 Cable News Network, Inc., a Time Warner Company. All rights reserved.