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New build figures for March dash hopes of property recovery in US

Figures from the US Commerce Department show that after surging 22% in February, housing starts then fell 10.8% in March to the second lowest level since the Commerce Department began keeping records in 1959.

On an annual basis, housing starts are down nearly 50% as builders mothball building projects for fear of falling real estate prices. Furthermore, applications for building permits, a barometer of future home construction, fell 9% compared with February.

It means that the seasonally adjusted annual rate of new starts was 510,000, a figure that blasting hopes that stability had begun to return to the housing market.

'It's disappointing. Half a million in starts is real low,' said Kurt Karl, chief US economist at Swiss Re. But he added that things are hitting the floor and are likely to turnaround over the next few months.

The pace of single family housing starts in March, which excludes apartment buildings, was actually unchanged from February's revised figure of 358,000 the Commerce Department said, meaning there was a significant fall in apartment construction during the month of March. Ironically, apartment construction was the driving force for housing starts last month, increasing by 82%.

In terms of construction volume in March, the South fared the best comparatively speaking, as the region started construction on 268,000 total housing units and 191,000 single family homes. But its month-over-month pace for all housing starts still fell 16.8%.

The Northeast experienced the slowest pace in volume, starting just 67,000 housing units and 47,000 single family homes. Although, single family homes in the Northeast saw the biggest month-over-month increase, climbing 30.6% from February to March.

Building permits, which are less volatile than construction starts, hit record lows, falling 9% in March to a seasonally adjusted annual pace of 513,000, which is well below most analysts predictions. Permits for single family homes fell 7.4% to 361,000, the second-lowest on record.