Housing starts in the U.S. fell in February from a three-yearhigh, showing the recovery in the residential real estate marketwill take time to develop.

Builders broke ground on 698,000 homes at an annual rate, inline with the median forecast of economists surveyed by BloombergNews and down 1.1 percent from a January pace that was strongerthan previously reported, Commerce Department figures showed todayin Washington. Building permits, a proxy for future construction,climbed to the highest level since October 2008.

The pace of home building was led by a jump in multifamilyconstruction that indicates demand for rental housing is increasingas Americans remain concerned about the prospects for single-familydwellings. Distressed properties and more foreclosures continue tothreaten the outlook for property values.