Washington ? Housing construction fell in August for the third-straight month, but mortgage rates dipped this week to a new three-decade low, which could spur more home sales.

Home builders broke ground on a seasonally adjusted annual rate of 1.61 million units in August, a 2.2 percent decline from July, the Commerce Department reported Thursday. Although the drop surprised analysts who were predicting an increase in housing projects, they did not find it alarming.

“With mortgage rates continuing to edge lower, and homebuilder sentiment resilient, we believe that housing activity will stabilize,” said Maury Harris, economist at UBS Warburg.

Even with the housing construction declines during the past three months, the level of activity is still good, economists said. Mild winter weather led to a flurry of home building at the beginning of the year, a pace that economists said was too brisk to be maintained.