WASHINGTON: U.S. single-family homebuilding increased in March, while permits for future construction surged, suggesting that the worst of the housing market slump was likely behind.

Single-family housing starts, which account for the bulk of homebuilding, rose 2.7% to a seasonally adjusted annual rate of 861,000 units last month, the Commerce Department said on Tuesday. Data for February was revised higher to show single-family homebuilding rising to a rate of 838,000 units instead of the previously reported 830,000 unit-pace.

The Federal Reserve’s aggressive interest rate hiking campaign has pushed the housing market into recession, with residential investment contracting for seven straight quarters, the longest such streak since the collapse of the housing bubble triggered by the 2007-2009 Great Recession.

US annual house price growth slows further in January

There are, however, signs that the housing market is stabilizing at very depressed levels. A survey on Monday showed the National Association of Home Builders/Wells Fargo Housing Market index climbing to a seven-month high in April.

Mortgage rates have retreated from last year’s highs, with the rate on the popular 30-year fixed mortgage declining from a peak of 7.08% in early November to 6.27% last week, according to data from mortgage finance agency Freddie Mac.

But the recent financial turmoil following the collapse of two regional banks could result in banks and mortgage lenders tightening underwriting standards. Single-family building permits jumped 4.1% to a rate of 818,000 units in March.