A double shot of good news fueled shares in local homebuilders and lenders Wednesday.

The Commerce Department said Wednesday that housing starts plunged to the lowest level in 17 years for the month of March — fueling hopes that less construction will help the market work through the growing glut of unsold homes. Shares in Los Angeles-based KB Home added 5.5 percent to $24.15 while Calabasas-based Ryland Group Corp. added 3.3 percent to $33.

Shares in local lenders also got a boost Wednesday after the Mortgage Bankers Association said application volume increased 2.5 percent during the week ending April 11 mainly due to dropping interest rates.

Shares in Pasadena-based thrift/mortgage IndyMac Bancorp. added 8 percent to $4.23 while shares in Calabasas-based Countrywide Financial Corp. added 6.1 percent to $5.04.

The association said that the average interest rate for a 30-year fixed-rate mortgage fell to 5.74 percent from 5.78 percent. The average rate for 15-year fixed-rate mortgages, often a popular option for refinancing a loan, fell to 5.27 percent from 5.39 percent.

Subsequently, refinance volume increased 5.2 percent during the week — refinance applications accounted for 54 percent of total mortgage applications.