In February, more new home constructions were begun than experts had expected, signaling that the housing market is adapting to higher interest rates and performing better as time goes on.

Housing starts were up 9.8% for February, hitting a seasonally adjusted rate of 1.45 million per year. Experts had predicted an increase of only 0.1% to 1.31 million following a January report which came in well below expectations.

Despite February’s unexpectedly strong number, starts are still down substantially since the Fed began its campaign of interest rate hikes. Starts are down 18.4% from one year prior.

Single family home starts increased 1.1%. Apartment and condo starts were up 24.1%.

The National Association of Home Builders said on Wednesday that its measure of confidence among home builders showed confidence rising in March, marking the third consecutive rise in builder sentiment.