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New-home construction takes a pause

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Posted at 9:05 AM, Apr 17, 2012
and last updated 2012-04-17 10:20:14-04
By Les Christie

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.

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