New-home construction sputtered again last month in the Colorado Springs area, while the pace of local foreclosures showed no signs of slowing.

Single-family building permits in the Springs and surrounding El Paso County totaled 102 in February, down 43 percent from the same month a year ago, according to a Pikes Peak Regional Building Department report released Monday.

For the first two months of the year, permits have totaled 223, down 39.7 percent from the same period in 2007. Last year, permits totaled 2,135, the lowest annual total since 1991.

“It looks like all the signals are that we’re going to have a pretty slow year,” said Colorado Springs economist David Bamberger of Bamberger and Associates, which has done work for the housing industry.

Bamberger said he’s heard some homebuilders are seeing a slowdown in traffic on the part of buyers. Other builders, however, have said they’re seeing an increase in recent months in interested buyers — those who are qualified for loans and serious about buying.

Pam Keller of Springs homebuilder Keller Homes said it’s a good time to buy for a variety of reasons. Housing supplies in some neighborhoods where her company builds are tighter than in other areas, and new home sites are being developed only on a limited basis, she said.

As supply in some areas tightens, construction costs aren’t getting cheaper, she said. With interest rates in the 6 percent range, many buyers should consider building or purchasing now rather than waiting for the bottom of the market and expecting to get a lower price down the road, she said.

The construction slowdown already has had a ripple effect on the local economy. The housing industry employs thousands, and several local builders and contractors have laid off workers. Sales taxes collected on the purchase of building materials, meanwhile, helps pay for police and fire protection, roads and other government services.

Foreclosures totaled 457 in February, a single-month record and a 72.5 percent increase over the same month last year, according to the El Paso County Public Trustee’s Office.

Sluggish home construction and rising foreclosures mirror what’s happening nationwide, not just in Colorado Springs, said Fred Crowley, an economist with the University of Colorado at Colorado Springs.

Many communities are wrestling with weak job growth and sagging consumer confidence, which does little to make some people want to build a home, he said. Some homeowners, meanwhile, are losing their properties to foreclosure because they can’t afford mortgage payments now that their adjustable-rate loans have increased. Also, gasoline costs have soared and minimum credit card payments are up from a few years ago, he said.

“People are being careful, very careful, and unfortunately that translates into cutting back on buying everything, and that includes new homes,” Crowley said.

Tom Mowle, the newly appointed El Paso County Public Trustee, said the trend of rising foreclosures over the past three months should be the focus, not just the record number of filings in February.

Foreclosures are coming into his office, which processes foreclosure notices, at the rate of about 25 a day, which means about 500 a month, Mowle said.

“There’s really no reduction in site,” he said.

In addition to the financial hardship for homeowners, Mowle said mounting foreclosures could have an effect on property values. Foreclosed homes coming back on the market and being sold at a discount could result in lower property values for surrounding homes, which could also reduce the tax base for city and county governments, schools and the like, Mowle said.

In Colorado, foreclosure filings are the first step in the legal process that can lead to the loss of home. Not all foreclosures result in that, however.

Some homeowners come up with money to catch up with missed mortgage payments, known as “curing” their loan. Others work out payment plans with lenders, who then withdraw foreclosure notices.

Meanwhile, the current rate of foreclosures being filed in El Paso County is less than in the late 1980s, when a similar number of foreclosures was spread out over a smaller number of area households.

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