The Mortgage Bankers Association, in its quarterly mortgage survey released Wednesday, reported that the percentage of mortgages that started the foreclosure process in the April-to-June quarter rose to 0.43 percent. That was up from 0.41 percent in the first quarter and was the highest in just over a year.

Even with the increase, the new foreclosure figure is still low by historical standards and thus not overly worrisome to lenders. But it suggests that some borrowers are feeling pinched.

Foreclosure rates in the second quarter were highest for "subprime" borrowers - people with weaker credit records who are considered higher risks - who have adjustable-rate mortgages.

Rising interest rates can raise monthly payments for people who have adjustable-rate mortgages and that can be a strain if people stretched to buy a home and don't have a financial cushion in their savings accounts.

The percentage of mortgage payments that were 30 or more days past due for all loans tracked edged down to 4.39 percent in the April-to-June period. That was lower than the 4.41 percent delinquency rate registered in the first quarter and was the best showing in a year.

Doug Duncan, the association's chief economist, said that fundamentally sound economic conditions helped to keep the delinquency rate from moving up in the second quarter. "Going forward, we expect some further slowing in the economy and the housing market. As a result, we will see modest increases in delinquency and foreclosure rates in the quarters ahead," he said.

However, housing experts testifying at a Senate hearing Wednesday expressed hope that the overall housing sector will make a safe landing. It could be a bumpy ride, though, in some local markets.

Studies by the Federal Deposit Insurance Corp. "indicate that housing price booms historically have not necessarily been followed by housing price busts," said chief economist Richard Brown. "Instead, they found that housing busts were usually associated with episodes of local economic distress."

Thomas Stevens, president of the National Association of Realtors, predicted that growth in home prices will be "minimal - less than 3 percent" this year and next. In the months ahead, prices could drop in some markets said David Seiders, chief economist at the National Association of Home Builders.

Sales of both new and existing homes are expected to fall this year - after logging record highs in the previous five years. The housing cooldown is playing a role in the economy's slower growth.

The Federal Reserve, which had been boosting interest rates for two-plus years, halted its campaign in early August to give it time to assess conditions. Many economists believe the Fed will leave rates alone when they meet next week.

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