US homebuilders still face risks, despite improvements in home sales and housing starts, and Moody’s Investors Service expects building industry's operating losses to worsen by 8% in 2009. While Moody’s believes the sector will improve modestly in 2010, it will remain in a loss position and will experience more than $500m in combined operating losses in 2010. Moody’s vice president and senior credit officer Joe Snider expects homebuilders to continue generating pre-impairment operating losses over the next 12 to 18 months. An increase in foreclosures and weak employment figures will contribute to house prices at their currently low levels, and might cause prices to fall more and for a longer period than currently anticipated. "We expect that the industry's one relatively bright spot — that is, robust cash-flow generation — will keep fading in the year ahead, as inventory liquidation plays itself out and funds from operations remain negative," Snider said. Write to Austin Kilgore.