SILVER SPRING, Md. (AP) — Construction of U.S. homes jumped 17.3% in June as some states reopened, but the pace still lags last year after this spring's massive slowdown in building activity due to the coronavirus outbreak.

The Commerce Department reported Friday that new homes were started at a seasonally adjusted annual rate of 1,186,000 in June after a modest recovery in May followed steep declines in April and March. Even after a second straight month of increases, construction activity remains 4% below last year’s pace.

Applications for building permits, a good indication of future activity, rose 2.1% to 1.24 million units.

Home builders had been hopeful that housing would recover as the nation reopens, spurred by the lowest mortgage rates in 50 years. However its unclear whether the rebound is sustainable as infections have spiked, especially in the South, where business have reopened and people have been increasingly venturing outside of their homes.