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.The housing market is looking healthier, but U.S. Housing and Urban Development Secretary Shaun Donovan said Wednesday that it is too early to tell if the recovery has taken hold.

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

Donovan said he was optimistic that President Obama’s policies are bolstering the market.

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, he said.