Schwarzenegger sees good signs for California housing market

LOS ANGELES (Reuters) - California Gov. Arnold Schwarzenegger said he saw signs of improvement in the state's housing market that helped make up for a rise in unemployment.

In a statement responding to the 7.3 percent July unemployment rate the state reported on Friday -- California's highest monthly rate in 12 years -- Schwarzenegger said he was encouraged by recent increases in housing sales and a stabilization of jobs in certain sectors.

Later, when asked at a news conference following the Border Governors Conference to explain how he could see the positive side of unemployment, he said: "We have certain signs in certain areas where the housing markets are coming back, where the sales of houses are increasing and so on.

"What I'm saying is we have hit, I think, the bottom," the governor said. "And so I'm optimistic that it could turn around and that we slowly see again homes being sold and therefore creating more jobs."

California has been one of the states hardest hit by the mortgage meltdown and falling housing prices, tarnishing the reputation of the Golden State.

(Reporting by Nichola Groom; Editing by Peter Henderson and Braden Reddall)