The New NormalPosted 04/26/2013
Is there really any such thing as “normal”? The folks at real estate data company Trulia believe so, especially when it comes to defining how things should look in the nation’s housing industry. Their monthly Housing Barometer conveniently gauges how quickly the residential market is moving back to normal based on the performance of construction starts, existing home sales and delinquency-plus-foreclosure rates. The tool measures current conditions against those recorded at the depths of the housing crisis and those recorded before the housing bubble burst.
As of March, the Housing Barometer shows the U.S. housing market is more than half way back to normal – 56 percent of the way there, to be exact — up from 43 percent six months ago.
Trulia notes March’s residential construction starts posted a 47 percent annual gain, and reached their highest level since June 2008. Although existing home sales dipped slightly between February and March, they still were 10 percent higher than they were a year ago. Meanwhile, the share of mortgages in delinquency or foreclosure dropped to 9.96 percent, down a full percentage point from the year prior.
While recovery is slow – the market improvement between February and March was only two percentage points — it’s on the right track. One year ago, the market was only a third of the way back to normal, Trulia reports, underscoring the significance of current market indicators.
In fact, March’s improvement is even better than it looks, says Jed Kolko, Trulia’s chief economist. The shift of sales from distressed to conventional and early signs that the inventory crunch may be easing should bring some relief to prospective homebuyers.
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