The housing market remains trapped in a quagmire, according to two reports released Tuesday, but some signs emerged that hint the sector could start to see daylight before long.

Home loans in default rocketed higher during the second quarter in the East Bay and elsewhere, and housing starts plunged to new depths. But the foreclosure spree may be starting to abate, real estate agents and DataQuick Information Services analysts suggested. And some favorable trends could bolster the housing construction market by 2009, home builders said.

"The small increase in defaults from the first to second quarter may indicate that we're nearing a plateau," John Walsh, DataQuick president, said in a prepared release.

"There is pent-up demand among buyers," said Joseph Perkins, president of the Home Builders Association of Northern California.

Yet plenty of pain torments housing. Defaults in the April-to-June quarter more than doubled in the East Bay and San Mateo County compared with the same period in 2007, DataQuick reported.

And single-family housing starts fell 48 percent in the East Bay in June compared with June 2007, the California Building Industry Association said.

Statewide, lenders issued a record 121,341 default notices — the first step in the foreclosure process — in the second quarter. That was 124.9 percent higher than the same quarter in 2007 but only 6.6 percent more than the first three months of 2008. But the

Compared with the second quarter of 2007, defaults jumped by 137 percent in Alameda County, 118 percent in Contra Costa County, 130 percent in San Mateo County, and 128 percent in Solano County.

Joe Brown, president of Coldwell Banker Residential Brokerage in the East Bay and South Bay, said an increase in short sales could explain the moderating foreclosure trend. In a short sale, a home is sold for less than the loan balance.

"So the lender is more (agreeable) to dealing with the seller and making the short sale a little easier for the homeowner than they were six months ago," he said.

The selling of many foreclosed homes is also a factor.

"We've cleared out a bunch of the (foreclosed) properties in Brentwood, Antioch and the Delta," said Gretchen Pearson, president of Windermere Services Northern California.

Brisk sales of foreclosed homes have hampered home building, said Alan Nevin, chief economist of the California builders group.

In several California markets, including the East Bay and San Joaquin County, foreclosed homes — many quite new — make up the majority of home sales.

"The builders are in competition with the foreclosure market, and they can't compete," Nevin said.

Single-family construction fell in June 2008 compared with June 2007, builders said: