Home Construction Sinks As Jobless Claims Brighten

Housing starts fell in March after February's surprise surge, but there were fewer first-time claims for unemployment benefits last week, the federal government reported Thursday.

Meanwhile, the number of U.S. households threatened with foreclosure grew 24 percent in the first quarter of 2009 and could rise further as major lenders restart foreclosures after a temporary break, according to data released Thursday by the listing firm RealtyTrac.

Construction of new homes and apartments dropped by 10.8 percent last month to a seasonally adjusted annual rate of 510,000 units, the Commerce Department reported Thursday. The report is likely to dampen talk of a recovery in the housing sector.

On a brighter note, the Labor Department said first-time state jobless claims declined 53,000 to a seasonally adjusted 610,000, significantly lower than the 655,000 analysts had expected. Revised figures from the week before were at 663,000.

The four-week average of new jobless claims, a better gauge of underlying labor trends because it irons out week-to-week volatility, fell to 651,000 from 659,500 last week.

But continuing claims — which represent the total number of people taking benefits — rose again for the week ending April 4, an indication that laid-off workers are having a tough time finding new work. The total number of people remaining on the jobless benefit rolls rose 172,000, topping 6 million for the first time.

The latest figures give no clear sign of whether the economy is nearing bottom or has further to fall. The Federal Reserve and the White House have said in recent days that there are faint signs the economic plunge is starting to level off.

The March data on housing starts reflected the second-lowest construction pace on records that go back 50 years. The decline was worse than many economists had expected, and February activity was revised lower as well, to 572,000 units.

New building permits, an indication of where the sector is heading, dropped 9 percent to a record low 513,000 units, from 564,000 units in February. That was well below analysts' estimates of 550,000. Building completions rose 3.5 percent to 824,000 units.

Western states were the worst hit, with starts there falling 26.3 percent to a record low 73,000 rate.

RealtyTrac on Thursday said the sharp increase in foreclosure notices was largely a result of the industry renewing foreclosure proceedings after agreeing under congressional pressure in February to a hiatus.

"A big reason for the spike in March is the inevitable hitting the market of properties that were delayed from foreclosure by what amounted to an industrywide moratorium until March 6," said Rick Sharga, senior marketing vice president of RealtyTrac.

From NPR and wire reports

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