Storm clouds could be building for the housing industry, even with starts of new construction rising in May to the highest in more than a decade.

Mortgage applications, as tallied by the Mortgage Bankers Association, have risen just once since mid-April as the Federal Reserve gradually lifts borrowing costs.

While refinancing has taken the hardest hit, loans for new purchases remain well below levels seen during the housing boom more than a decade ago, data show.

Stay tuned: Mortgage applications data for the week ended June 15 will be issued Wednesday.

Underscoring the trend, permits for new construction -- considered a leading economic indicator -- dropped in May, the third decline in five months, according to Commerce Department data issued today.