WASHINGTON--New home construction declined 8% in March to an annual rate of 1.65 million, according to the Commerce Department.

February's housing starts were revised slightly higher to a rate of 1.785 million.

New starts of single-family homes dropped in March to 1.3 million. The decrease was the biggest percentage drop in single-family starts in seven years.

Construction of new homes was at a record-setting pace in March. Starts in 2002 are up 5% over 2001's pace. In 2001, builders started 1.6 million homes.