Homebuilders should expect material dampening of new-home purchases until then, Brungardt forecast. Current homeowners will also continue to be impacted unfavorably, he told TheStreet Thursday morning.

>>Homebuilder Sentiment Disappoints

Brungardt added that the recent spike in mortgage rates -- a jump of 70 basis points over a short period of time -- also worked to delay a housing market recovery. Rates are still historically low, he conceded, but need to stay in the 4.5% to 4.75% range in order to fuel a meaningful recovery.

>>Mortgage Activity Eases as Rates Edge Up

He expects mortgage rates will fall again and then level out for a period of time.

The average rate on a 30-year fixed mortgage increased to 4.84% in the week ending Dec. 10, from 4.66% in the prior week, the Mortgage Bankers Association said early Wednesday. It was the highest rate observed since early May and was the fifth consecutive weekly increase.

Stocks in the homebuilder sector were mostly higher Thursday following the report on housing starts and building permits. The SPDR S&P Homebuilders ( XHB), an exchange-traded fund that tracks the sector, was 1.2% higher in early-afternoon trading, while the iShares Dow Jones US Home Construction ( ITB) ETF rose 1.4%.

The U.S. housing market continues to struggle and has been under tremendous pressure for some time. Demand fell further after the expiration of federal tax credits for homebuyers earlier this year.

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here: Miriam Reimer.

>To follow the writer on Twitter, go to http://twitter.com/miriamsmarket.

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