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HousingNewsThe worst of the mortgage crisis may be over. But that doesn’t necessarily mean that homeowners are out of the woods just yet. A series of reports released recently suggest that housing markets will continue to suffer for some time to come.

First there was this report by the Department of Housing and Urban Development, which found that builders started construction on 529,000 houses in December. That was a 4.3% drop from the month before, and 8.2% lower than December 2009. Builders also requested fewer permits to build houses in the future, filing 440,000 building permit requests in December. That was 6.8% fewer than the same time last year.

Builders also completed fewer houses last month than they did in December 2009. They finished 585,000 houses at the end of 2010, 22.2% lower than the number completed in December 2009.

The Obama administration tried to put the best possible spin on these disappointing numbers.

“Today’s data show that the housing market is still very volatile from month to month,” Commerce Secretary Gary Locke said in a press release.

[Article: HAMP Fails to Save Homeowners from Foreclosure]

Meanwhile, the overall picture of the mortgage market appears weak, and is likely to remain so, experts say. Of all new mortgages written in the U.S. last week, 73% were refinancing previous mortgages according to a report by the Mortgage Bankers Association.

The number of completely new mortgages held steady, the MBA found. But that’s likely to slow in coming months as interest rates creep upwards.

“Although it will be uneven at best, we think that there is a good chance that the economy will improve further in the remaining bit of the fourth quarter and the first month of the first quarter of 2011,” according to a forecast by HSH, a mortgage research firm. “If growth is rising, interest rates will, too.”

The mortgage bankers agree that an anemic recovery in the job markets will cause a similarly anemic housing rebound.

“Mortgage rates have moved somewhat lower since the beginning of the year, as mixed data on the job market continue to cloud the outlook for the economy,” Michael Fratantoni, the Mortgage Bankers Association’s vice president of research, said in a press release. “Refinance applications have picked up, as borrowers take advantage of lower rates, but purchase applications remain quite low, indicating that home sales are unlikely to pick up any time soon.”

The loss of federal incentives for homebuyers may continue to hurt the market, too. Home sales plummeted 20% in Brooklyn and Queens, New York in the last quarter, according to a report by Brown Harris Stevens and Halstead, a realty firm, and reported in the Wall Street Journal. Greg Heym, the company’s economist, blamed much of the decline on the end of federal tax incentives for first-time homebuyers.

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