WASHINGTON, Jan 7: US Treasury Secretary Henry Paulson warned on Monday that the housing market’s woes are far from over, but said the government was mulling further measures to minimise economic harm.

Paulson said a housing correction had been “inevitable” following years of rocketing property prices, but stressed that the government wanted to find effective remedies to offset the housing downturn rather than providing quick fixes.

The US housing market has been in a decline for almost two years as property sales have slumped and prices have tumbled amid tightening credit, triggering wider economic uncertainty.

“Our most immediate goal is to minimise the impact on the real economy,” Paulson will say, according to excerpts of a speech the Treasury chief is due to deliver in New York later Monday, released in advance.

“This will require patience as we thoughtfully evaluate next steps. Working through the current situation and getting the policy right is more important than getting the policy announced quickly,” Paulson said.

Some economists are speculating that the administration of US President may soon unveil a package of economic policies aimed at bolstering the US economy which is facing one of the worst housing meltdowns in decades.

Tighter credit markets, falling bank profits and concerns about job growth have led some economists to predict the country could be on the cusp of a recession.

“After years of unsustainable price appreciation and lax lending practices, a housing correction was inevitable and necessary,” Paulson said.

According to the excerpts released by the Treasury, Paulson will also underline that interest rates on 1.8m subprime mortgage loans are due to reset higher in the next two years, raising the risk that more homeowners will be unable to pay their mortgage bills.

Mounting home foreclosures, especially related to subprime loans offered to Americans with patchy credit records, have worsened the housing malaise.

Paulson’s hint that the government is considering fresh remedies to bolster economy comes after the administration brokered a vast mortgage relief plan last month aimed at helping up to 1.2 million distressed homeowners at risk of foreclosure.—AFP