Housing “Barometer” Shows Recovery Marches On

A number of signals continue to show the housing recovery marches on, according to the latest from Trulia’s Housing Barometer.

Each month, Trulia’s Housing Barometer charts the housing market’s path back to “normal,” measuring key housing indicators such as construction starts, existing home sales and the delinquency-foreclosure rate.

In March 2013, construction starts and the delinquency-foreclosure improved.

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Construction starts rocketed to a new post-bubble high, according to Trulia, coming in at a 1,036,000 seasonally adjusted annualized rate. This rate represents a 7% increase from February and a 47% increase year-over-year, what Trulia mentions is the highest level since June 2008.

In March, 38% of new starts were in multi-unit buildings, compared with the typical level of 20%, Trulia notes.

Given this marked progress, construction starts are now more than half (55%) of the way back to the normal level of 1.5 million from their lowest level during the market bust.

Delinquency and foreclosure rates dropped yet again, with mortgages in delinquency or foreclosure falling 9.96% in March, down from 10.18% in February.

March’s levels were even lower than those recorded on a year-over-year basis, when the delinquency and foreclosure rate was 10.18%, according to Trulia’s findings.

Combined, the delinquency and foreclosure rate is 48% back to normal and is also at its lowest level since October 2008.

While increasing construction starts and declining foreclosure-delinquency rates continue to drive the market’s recovery, existing home sales experienced a slight decrease.

Sales fell 0.6% in March to a seasonally adjusted annualized rate of 4.92 million homes. Although the rate fell from the previous month, it nonetheless represents a 10% increase from a year ago.

Excluding distressed sales, conventional home sales rose 23% year-over-year in March with inventory rising for the second consecutive month.

Overall, existing home sales are 68% back to normal, writes Trulia.

Averaging the “back-to-normal” percentages for these three housing indicators, Trulia finds the housing market is nor 56% of the way back to normal levels, up 54% in February and 43% six months ago in September. A year ago, the market was only 33% back to normal.

“Furthermore, this month’s improvement is even better than it looks with the shift of sales from distressed to conventional and early signs that the inventory crunch may be easing,” writes Jed Kolko, Trulia’s chief economist.

An easing of this inventory crunch, says Kolko, may help bring some relief to potential homebuyers.

Written by Jason Oliva

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