U.S. home-building activity collapsed in March as the coronavirus spread, with housing starts tumbling 22.3% from a month ago.

The Commerce Department said Thursday that groundbreakings occurred last month at a seasonally adjusted annual rate of 1.2 million units, down from a 1.56 million pace in February. Construction of single-family houses fell 17.5%, while apartment and condo starts were off 32.1% from a month ago.

The drop in housing starts was the worst monthly decline since the 1980s, when new home construction plunged 26.42% in March 1984.

All of this paints a bleak outlook for housing as the lockdown to contain COVID-19 has led more than 20 million Americans to lose their jobs in the past four weeks.

There was a 6.1% decline in the completion of homes being constructed, which means many homes are being left half-built. The drop was 15% of single-family houses, meaning that unless economic activity picks up soon there could be ghost towns half-built housing developments, a phenomenon last seen in the aftermath of the 2008 financial crisis.

Construction activity will likely continue to slow. There was also a 6.8% drop in permits to begin construction in March.

Homebuilders have become fearful. A confidence index released Wednesday by The National Association of Home Builders and Wells Fargo plunged 42 points in April to a reading of 30, the largest single monthly change in the history of the index. Any reading below 50 signals a decline.

—CNBC contributed to this report.