It really isn't surprising, but it has been found that fewer homes broke ground in March 2009, while building permits ebbed to a record low. Homebuilders are definitely serious about reining in on their home inventory with the rising tide of foreclosure.

The Department of Commerce reported that building permits were only at 513,000 in March 2009, falling 9% compared to the same period in 2008. Groundbreaking fell to 510,000.

With so many unsold properties across the United States, it's no wonder that the rate of construction has gone down. Prices of new and old homes have gone down too, with prices in 20 U.S. cities dropping 29% since they peaked in July 2006. The current administration is trying to reverse the tide of foreclosures, with the Federal Reserve buying mortgage securities to lower home-loan rates and increase the demand for houses.

Currently, more people are buying distressed homes rather than buying new homes. The reason is rather simple. Distressed homes, or homes that are about to be foreclosed are deeply discounted in their prices. This has led more builders to build less homes to adjust to the low demand for new homes.

The decline in the housing industry came after a six-year peak in January 2006, when 2.27 million were built. Since then, building works have steadily declined as more homes got foreclosed and the economy plunged into a recession.

But as the price of houses decline, the demand for houses is expected to pick up once again. But it is not expected to happen anytime soon as rising unemployment rates are stopping Americans from big ticket items, like a house.