ECONOMIC REPORT -- LAST WEEK IN THE NEWS!

After three months of declines, the pace of housing construction -- measured by the number of new housing starts -- rose 5% in May to a 1.957 million-unit annual pace, the Commerce Department reported June 20. (Economists had expected May housing starts to stabilize at a 1.85 million-unit pace.) Permits for future groundbreaking, an indicator of builder confidence, fell by 2.1% to a 1.932 million-unit pace in May, the lowest since November 2003 and the first time since January that total housing permits fell below starts.

The Conference Board, an industry-backed research group, said its Index of Leading Economic Indicators slipped 0.6% in May after a 0.1% decline in April, which was in line with analysts' expectations. Seven of the 10 indicators that comprise the closely watched index decreased, led by weekly jobless claims which rose by a larger-than-expected 11,000 for the week ending June 18.

Orders for durable goods -- items expected to last three years or longer -- fell 0.3% in May after an even bigger 4.7% plunge in April, the Commerce Department reported June 23. A decline in orders for commercial aircraft led the weaker-than-expected showing.

On June 22, Freddie Mac reported that interest rates on 30-year fixed-rate mortgages reached their highest level in more than four years. Not surprisingly, U.S. mortgage applications fell by 0.8% for the week ending June 16, according to the Mortgage Bankers Association. While the MBA's purchase index rose 0.1%, refinances fell 2.2%.

(INFORMATION PROVIDED BY COURTESY OF Louise Rose, ELB Mortgage Brokers)