WASHINGTON–Housing starts declined 4.8% to a seasonally adjusted annual rate of 1.16 million units, according to data released by the Commerce Department.
June's sales pace was also revised down to 1.21 million units from the previously reported 1.22 million units, Commerce said.
The report also showed a decline in building permits, suggesting that residential construction could struggle to regain momentum after contracting in the second quarter at its steepest pace since the third quarter of 2010.
Meanwhile, applications for home purchases declined last week, helping to erode gains made by refinancing activity, according to the Mortgage Bankers Association. The MBA reported its Market Composite Index barely increased, moving just 0.1% on a seasonally adjusted basis when compared to one week earlier. The unadjusted index fell 1%.
According to The MBA Market Composite Index:
- The average contract interest rate for 30-year FRM with conforming loan balances ($424,100 or less) was at its lowest point since last November, 4.12% compared to 4.14% a week earlier. Points were unchanged at 0.38, and the effective rate decreased.
- Jumbo 30-year FRM, loans with balances greater than $424,100, had a contract rate averaging 4.04%, down three basis points week-over-week. Points rose to an average of 0.27 from 0.26, and the effective rate moved lower.
- The average contract interest rate for 30-year FRM backed by the FHA decreased to 4.01% from 4.02%. Points increased to 0.40 from 0.38 and the effective rate did not change.
- The rate for 15-year FRM was unchanged at 3.41%, with points decreasing to 0.35 from 0.41. The effective rate decreased from the previous week.