Texas mortgages in 90-day delinquency or in foreclosure declined among both prime and subprime borrowers in 2Q as the market climbs out of a recovery, according to the Federal Reserve Bank of Dallas. The Texas economy added 14,700 private-sector jobs in August. That 2.1% annual rate is stronger than the 1.7% growth recorded in July. From last year, employment in Texas has grown at a 2.7% annual rate, more than double the 1.1% rate nationally. On a quarterly basis, though, jobs growth slowed to a 1.9% annual rate in the third quarter, down from 3.7% three months before. The average amount of time a person spends unemployed in Texas is 25 weeks, more than a month below the 30-week average for the nation. The Dallas Fed expects job growth to be between 2.5% and 3% annually in 2010 and stay modest through 2011. While delinquencies are down in Texas, the state has not escaped the lack of demand in the housing market's origination sector. In the post-tax credit era, Texas home sales dropped 17.9% in July and 22% from the year before. Still, the monthly drop fared better than the 27% drop seen nationally that month. According to the National Association of Realtors, home sales did pick up off that bottom in August. After hitting bottom in 2009, residential construction activity picked up through the early part of 2010, but has since begun to move downward. This, according to the Dallas Fed, could point to an impending reversal in local homebuilding activity. The Dallas Fed's Texas Manufacturing Outlook Survey (TMOS), an index of eight leading economic indicators, signaled slower growth ahead. "The Texas Leading Index appears to have paused after showing sustained increases earlier in the year, suggesting a slower pace of job gains, among other economic measures, in the coming month," the Dallas Fed said. Write to Jon Prior.