US President Barack Obama announced on Friday a US$1.5-billion fund to help homeowners in five states hit hardest by the country's housing crisis.

Obama said the fund will support local housing finance agencies in California, Florida, Nevada, Arizona and Michigan, which have seen home prices decline more than 20 percent from their peaks.

"This fund's going to help out-of-work homeowners avoid preventable foreclosures," Obama told a town hall-style meeting at a school near Las Vegas in Nevada.

"It will help homeowners who owe more than their homes are worth find a way to pay their mortgages that works for both the borrowers and the lenders alike," said the president.

The collapse of the housing bubble triggered the global financial crisis that plunged the US economy into recession in December 2007.

After more than two years of the burst of the housing bubble, the housing market remains in trouble even though there are some positive signs.

The Commerce Department reported earlier this week that privately-owned housing starts rose at a seasonally adjusted annual rate of 2.8 percent to 591,000 last month, the highest level in six months and better than economists' expectation of 580, 000 units.

Over the past 12 months through January, housing starts were up 21 percent, a sign that underlying demand was beginning to firm again.

However, according to the US Mortgage Bankers Association, more than 15 percent of homeowners with a mortgage had missed at least one payment or were in foreclosure -- default notices, scheduled auctions and bank repossessions -- a record for the 10th straight quarter.

Another well-known housing market data tracking company RealtyTrac said on February 11 that foreclosure rate in January is 15 percent higher on a year-on-year basis.

Political analysts said that President Obama's new housing fund aims at boosting a Nevada Democrat who may change the balance of power in Congress.

(Xinhua News Agency February 20, 2010)