WASHINGTON, Feb 16 Reuters U.S. singlefamily homebuilding fell in January, but an easing in mortgage rates and improvement in homebuilder confidence suggested the recessionhit housing market was close to finding a floor.

Singlefamily housing starts, which account for the bulk of homebuilding, dropped 4.3 to a seasonally adjusted annual rate of 841,000 units last month, the Commerce Department said on Thursday. Singlefamily homebuilding tumbled 27.3 on a yearonyear basis in January.

Last month, singlefamily homebuilding plunged in the Northeast and West, with the latter likely depressed by flooding in California. Starts rose in the densely populated South as well as the Midwest.

Higher mortgage rates have pushed the housing market into recession. There are, however, signs that the worst of the housing market downturn is over. The sector has been the biggest causality of the Federal Reserve39;s aggressive interest rate hiking campaign.

The 30year fixed mortgage rate is averaging just above 6, a sharp retreat from the average of 7.08 in early November, according to data from mortgage finance agency Freddie Mac. A survey on Wednesday showed confidence among homebuilders surged to a fivemonth high in February, though it remained at depressed levels. The rise in sentiment was the largest since June 2013.

Starts for housing projects with five units or more fell 5.4 to a rate of 457,000 units. Multifamily housing construction remains underpinned by demand for rental…