Increases in housing starts and home sales seem to indicate to Fitch Ratings‘ analysts that the housing market has or is soon to bottom out, according to a 189-page report issued Wednesday. Fitch notes, however, that recovery from this housing bust won’t be like others seen since the 1960s. “The first year of a recovery tends to reflect a sharp upward thrust in demand,” the report said. “However, following an untypical expansion and then untypical correction, Fitch anticipates that the early stages of this recovery may be more muted than the average.” Key to the recovery, Fitch wrote, is the return of normalized housing starts and increased consumer confidence. Builder confidence is on the rise, Fitch said, as Q109 builder cancellation rates were lower than in Q408, and are approaching “normal” levels. New home inventories are also declining. For consumers — and particularly for potential second-home and trade-up buyers — there is substantial fear that now is not the right time to buy. “The expectation or fear is that home prices are vulnerable to further declines and buying now would be a mistake,” the Fitch report said. The cautious optimism in Fitch’s report echoes a Moody’s report issued Monday, which took a similarly conservative view of recent improvements, noting every positive contributing factor to housing recover seen thus far has an offsetting negative consequence. Both reports agree on their belief that the Obama Administration’s foreclosure prevention efforts are not as fruitful as they could be. Moody’s said the Making Home Affordable initiative has not had a meaningful impact. “The president’s initiative to keep people in their homes through mortgage refinancing and modification is clearly not working up to its potential,” Fitch said in its report. Write to Austin Kilgore.