PORTLAND – Maine’s home-building boom is slowing from its peak in 2005 in which 9,000 housing units, sending ripples through the economy and leaving builders looking for work.

Builders accustomed to a decade of steady growth are getting used to a slump, said Doug Hall, who owns William S. Hall & Sons of Yarmouth, a builder and general contractor.

“We are going through a hard spell right now,” Hall said.

The number of new housing units in Maine dropped 37 percent from the peak to 5,690 units in 2005, a year before the crisis in the subprime mortgage market hit. The subprime mortgage crisis continues to be a drag on the economy, raising fears of a national recession.

A growing number of foreclosures that stemmed from subprime loans – those with higher-interest mortgages granted to people with less-than-perfect credit – has only added to the problems.

The percentage of homes in foreclosure in Maine reached a record level during the last quarter of 2007, according to a Mortgage Bankers Association survey. The survey found that 2.36 percent of Maine homes with mortgages are in foreclosure, the highest rate since the association began keeping records in 1979.

Middle-class buyers, meanwhile, are changing their expectations, seeking simpler homes instead of insisting on niceties like hardwood floors, fireplaces and expensive kitchen countertops as many did during the boom, said Richard Cromwell, past president of the Modular Homebuilders Association of Maine.

Cromwell’s company, Modular Advantage in Brunswick, is building several houses that will be left unfinished. The owners will live on the first floor and finish the second floor later when they can afford it.

“People are willing to get rid of some of those expensive items if they can get into a nice home,” he said.

The problem is that too few are buying at all.

Many homeowners who refinanced and took cash equity out of their houses are now carrying heavy debt, said Gorham homebuilder Susan Duchaine. In many cases, they owe more than their homes can be sold for, so they’re staying in their homes instead of thinking about building something new, she said.

Because demand has plummeted, the price of plywood has fallen more than 50 percent since 2005, said Don Collins, president of Lavalley Lumber, which has two stores in southern Maine. Prices of other building supplies – except for steel and products made with oil – also have fallen, he said.

The only good news is that this is a great time for consumers, said C.D. Armstrong, president of Deering Lumber Co. of Biddeford. During the boom, he said, many contractors were too busy for small projects. Now they’re more willing to accept smaller jobs.