WASHINGTON (AP) — Construction of new homes fell again in February, but not as much as the previous month. Those declines follow a December surge which had pushed home construction to the highest level in 13 years.

Builders started construction on 1.60 million homes at a seasonally adjusted annual rate, a decline of 1.5% from 1.62 million units in January, the Commerce Department reported Wednesday. Analysts had expected a more significant drop. The economic impact of the coronavirus outbreak was not apparent in the February numbers.

Application for building permits, considered a good sign of future activity, fell 5.5% in February to an annual rate of 1.46 million units. However, permits for single-family home construction rose 1.7%.

“Single-family building permits rose for the tenth consecutive month to a cycle high of 1.004 million," said Neil Dutta, an economist at Renaissance Macro Research. “Thus, the housing market was really hitting its stride before the onset of the coronavirus in the United States. That said, with homebuilder sentiment easing March, expect the gains in permits and construction to ebb in the months ahead.”

Single-family housing starts were up 6.7% to 1,072,000 in February over the revised January figure of 1,005,000.

The report on housing starts showed that home building declined the most in the Northeast, falling 25.1%, followed by a 8.2% drop in the West. Home building fell modestly in the West and South regions.

The National Association of Home Builders reported Tuesday that its survey of builders’ sentiment declined slightly in February, but remains high.

The group said that builder confidence reflected a decline in mortgage rates, a low supply of existing homes and a strong labor market with rising wages and the lowest unemployment rate in a half century. But that could change drastically in the coming months as American industry braces for the impact of COVID-19, which is grinding the economy to a near halt as people stay home, airlines cancel flights and public events are called off.

“Due to the slowdown in economic growth and the volatility in markets from the coronavirus, mortgage rates will remain lower for longer, which will help homebuyers in the longer run," said Joel Kan of the Mortgage Bankers Association. “However, we may start to see these homebuilding trends take a turn for the worse, depending on the industry’s ability to continue day-to-day operations during these difficult times.”

The average rate on a 30-year-fixed mortgage ticked up slightly to 3.36% last week from 3.29% the previous week, which was the lowest level since mortgage buyer Freddie Mac started tracking the average in 1971. It could fall further this week after the Fed on Sunday slashed its benchmark rate to nearly zero.

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This story has been corrected to attribute the Mortgage Bankers Association quote to Joel Kan, not Adam DeSanctis.