For the first time since the real estate market crash, housing is more than 60% on its road to recovery, according to a Trulia Trends blog post.
The housing market is now 61% back to normal in May, according to Trulia’s Housing Barometer, which tracks the market’s progress back to “normal” by examining construction starts, existing home sales and the delinquency-plus-foreclosure rate.
Market progress recorded in May was up compared to the previous month when housing was 54% back to normal in April.
May also saw improvements among all three criteria of Trulia’s Housing Barometer.
Construction starts for the month were art a 914,000 seasonally adjusted annualized rate, up 7% from April, but still below February and March levels.
For now, construction starts are 43% of the way back to their normal level of 1.5 million, Trulia notes.
Existing home sales also climbed as inventory begins to expand, having risen 4% in May to a seasonally adjusted annualized rate of 5.18 million. Additionally, existing home sales are up 13% year-over-year.
While it looks like inventory bottomed in January, according to Trulia Chief Economist Jed Kolko, tight inventory isn’t holding back sales as much, as inventory expanded for the fourth straight month even after taking seasonality into account.
Overall, existing home sales are 82% back to normal.
The delinquency-plus-foreclosure rate continued to decline as the economy recovers and fewer people are falling behind on their mortgages.
The share of mortgages in delinquency or foreclosure dropped to 9.13% in May, compared to when it was 11.08% a year ago. The combined delinquency-plus-foreclosure rate is 57% back to normal as of May.
When averaged together, the criteria of Trulia’s Housing Barometer finds that the market is 61% of its way to a full recovery—the first time the Barometer has crossed 60% since the market crash.
The recovery has reached “full-fledged teenager status,” according to Kolko, who writes that the recover is now in its teenage years; awkward growth spurts and on the verge of having to support itself.
“Before long, the recovery should make it into adulthood, but it will face some grown-up challenges in the next couple of years,” Kolko adds.
One of these challenges Kolko mentions is The Federal Reserve threatening to take away the market’s allowance, as it winds down measures that pushed mortgage rates down to historic lows.
Written by Jason Oliva