There are some encouraging signs in the latest figures from the Case-Shiller housing index, released Tuesday, which found that the rate of decline in home prices slowed nationally during May for the fourth straight month, and has begun to level off and even reverse itself in certain metropolitan areas. The numbers echo other indications that the housing market may be stabilizing, as both new home construction and sales increased significantly in June. After sixteen consecutive months of record price declines between October 2007 and January 2009, the recent hints of a turnaround, though hardly a foregone conclusion, are certainly grounds for some cautious optimism.

But don’t uncork the champagne just yet. The latest foreclosure numbers are still bleak and likely to worsen, as an epidemic that has thus far been confined largely to the riskiest subprime and adjustable-rate borrowers shows signs of  spreading to more conventional homeowners with fixed-rate loans. After the housing crash of 2007, prices fell so far and so fast, in so many communities around the country, that more than one-in-five homeowners found themselves “underwater” on their mortgages by the first quarter of 2009. The percentage of prime borrowers with fixed-rate loans who were behind on their payments or facing foreclosure during the first three months of this year was more than double that during the same period in 2008.

Prices still have a long, long way to go before these borrowers will again see the light of day. Tuesday’s report indicates that home values have gotten back to where they were in mid-2003—which sounds good until you consider that it was only after 2003 that the housing bubble really took off. Prices are still down more than 30 percent from their peak in 2006, and it’s hard to see how, even by the most optimistic forecasts, we’ll get back to that level anytime soon. And with even Fed Chairman Ben Bernanke now acknowledging the likelihood that the job market will remain slack for some time to come, things will almost undoubtedly worsen before they get substantially better for millions of at-risk homeowners.

More troubling still have been the disappointing results of the Obama administration’s mortgage relief plan, ushered in in February with promises of helping more than three million troubled borrowers keep their homes by offering incentives to mortgage companies to renegotiate eligible loans. To date, though, only some 200,000 homeowners have been enrolled in the Treasury Department’s loan modification program, and that lackluster performance finally prompted the administration to summon representatives from twenty-five mortgage firms to Washington on Tuesday. According to reports, Treasury Department officials chastised the assembled mortgage executives for not moving more quickly to modify loans, and extracted a pledge from them to pick up the pace substantially between now and November 1.

Will a slap on the wrist from the White House be enough to make a difference? I’m not so sure. As Kai Wright pointed out in The Nation a few months ago, the Obama administration’s plan for addressing the foreclosure crisis shares at least one key attribute with earlier—failed—plans put forward by Congressional Democrats and the Bush administration over the last year and a half: “industry participation in the president’s plan is largely voluntary, if heavily subsidized.” If mortgage services decide they are better off foreclosing on at-risk loans—as they often do—rather than renegotiating, there is nothing in the Obama plan to stop them.

In a July 9 letter that precipitated Tuesday’s meeting, Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan told mortgage industry executives, “We believe there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we all share.” Geithner and Donovan are certainly right, but they have little leverage to work with in their attempts to get the mortgage companies on the same page. The Obama administration’s homeowner relief plan, in Wright’s words, “avoids fundamental questions: can the crisis be stopped as long as the mega-servicers call the shots, and can we simply buy them off?”

After five months of unimpressive results, it seems like the answer is no. And if that’s true, then unless the administration changes direction—and fast—we probably have many more months of trouble in the housing market ahead of us.