The iShares US Home Construction (NYSEArca: ITB) was down 1.5% on Wednesday morning to drop to its lowest level of the year before a key report on housing starts.

ITB is now negative for 2013 and came into Wednesday’s trading with a loss of 17% the past three months.

SPDR S&P Homebuilders (NYSEArca: XHB) is another ETF tracking the sector.

On Friday, investors will get a report on July housing starts and permits. The consensus forecast for housing starts is about 900,000 – up from 836,000 in June.

“Housing starts retrenched sharply in June on a downswing in the volatile multifamily component. And atypically wet weather likely weighed on starts. Housing starts in June fell back 9.9 percent, following an 8.9 percent surge in May,” according to Bloomberg. “June’s starts level was the lowest since August 2012.”

The recent weakness is homebuilder ETFs has triggered worries the housing market could be losing momentum. The pullback in builder ETFs has also coincided with the move higher in mortgage rates.