New home construction in the United States fell by 10.8 percent in March to a seasonally adjusted annual rate of 510,000 units, the second lowest level on record, the U.S. Commerce Department reported on Thursday.

The March fall was worse than economists had expected and housing starts in February was revised lower as well. That provided fresh evidence that the housing slump, which was a major factor triggering the current recession, has not ended.

The record low was a 488,000 unit pace set in January this year.

For March, single-family housing starts were flat at a seasonally adjusted annual rate of 358,000 units after a 0.6 percent gain in February.

Multi-family housing starts, however, plunged by 42.6 percent to an annual rate of 116,000 units, following a 69.7 percent surge in February.

By region, the biggest drop was a 26.3 percent decrease in activity in the West, followed by a 16.8 percent decline in the South. Home construction posted a 15.9 percent rise in the Midwest and a 6.3 percent increase in the Northeast.

Permits for future groundbreaking, an indicator of builder confidence, also fell by 9 percent last month to an annual rate of 513,000 units. Analysts were expecting permits to be at a pace of 550,000 units.

Dragged by the severe housing slump and a persisting credit crisis, the U.S. economy has been in recession since December 2007. In the final quarter of 2008, the economy contracted at an annual rate of 6.3 percent, the biggest slide in about 25 years.

Economists believe that consumers and businesses will keep cutting back their spending and the economy will continue to decline in the first half of this year.

Many economists are projecting an annualized drop of 5 to 6 percent for the current quarter.

(Xinhua News Agency April 16, 2009)