WASHINGTON (Reuters) -- The U.S. housing market is showing some early signs of a turnaround, but its too early to say if a full recovery is underway, Housing and Urban Development Secretary Shaun Donovan said on Wednesday.
“We do have some early signs I think that the market is stabilizing. Since January, what we’ve seen is both prices and sales volumes moving up and down around a relatively stable number,” Donovan said at the Reuters Global Financial Regulation Summit in Washington.
U.S. house prices tumbled nearly 19 percent in February. But for the first time in 16 months, the fall did not set a new record, according to data released on Tuesday by S&P Case-Shiller.
“I want to be clear, I think it’s too early to say that is a long term trend until we get a couple more months of data,” Donovan said on Wednesday.
Donovan made his comments as the Federal Reserve said the pace of deterioration in the U.S. economy appeared to be slowing but that it would continue to keep interest rates exceptionally low to ensure recovery.
The Fed has kept rates exceptionally low in part to bolster the housing market, considered critical to full economic recovery.
U.S. home loan applications fell last week to the lowest level since mid-March, driven by a big drop in refinancing demand even as mortgage rates clung to record lows, according to the Mortgage Bankers Association on Wednesday.
Still, Donovan expressed optimism the new Obama administration’s policies to help troubled homeowners would bolster the housing market.
The U.S. Treasury Department on Tuesday announced new measures to help embattled homeowners get lower payments on second mortgages that can be a big hurdle for those trying to avoid foreclosure.
The Treasury will tap a $50 billion housing rescue fund to help pay off mortgage investors and so cut monthly payments for potentially millions of borrowers.
“I think in particular when you get below the national level what you see is that in markets like California that were the hardest hit, that is where the signs (of recovery) are the strongest,” Donovan said.