MADISON, Wis. -- A new state report said the Wisconsin housing market is expected to handle the current economic turmoil better than the rest of the country.

The analysis from the Wisconsin Department of Revenue shows Wisconsin home prices rose 1 percent in the second quarter versus a year ago while national home prices dropped nearly 2 percent.

When it comes to foreclosures, Wisconsin is also outperforming the nation.

The state analysis said that while Wisconsin has a higher rate of subprime mortgages in foreclosure than the nation, the state has fewer such loans overall.

But the state housing market hasn't reached bottom yet. That's because Wisconsin homebuilding permits continue to fall and foreclosures continue to rise.

According to the state report, Wisconsin homebuilding permits are expected to hit bottom in the next few months and then start to recover in late 2009.