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Though new homes represent less than 10 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics compiled by the Realtors. A key reason for weak sales in the new-home market is that builders must compete with foreclosures and short sales. (Short sales occur when lenders allow homes to be sold for less than what's owed on the mortgage.) About half of the states reported sharp increases in foreclosure activity in February. The pace of foreclosures is rising now that states have reached settlements with the nation's five biggest mortgage lenders over foreclosure abuses. Builders have stopped working on many projects because it's been hard to get financing and to compete with cheaper resale homes.
[Associated
Press;
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