Skip Navigation

Commentary & Analysis

Trulia’s Housing Barometer: Recovery Slowly, Steadily Pushes Ahead

By | May 22, 2012
Trulia's Chief Economist takes a monthly look at new construction starts, existing-home sales and the delinquency-plus-foreclosures rate to see how far away we are from a normal housing market.

Each month Trulia’s Housing Barometer charts how quickly the housing market is moving back to “normal.” We summarize three key housing market indicators: new construction starts (Census), existing-home sales (NAR) and the delinquency-plus-foreclosure rate (LPS First Look). For each indicator, we compare this month’s data to (1) how bad the numbers got at their worst and (2) their pre-bubble “normal” levels.

April data, released over the past few days, showed:

Construction starts rose. Starts increased from an upwardly revised 699,000 in March to 717,000 in April. Since November starts have been in the 700,000 range. But starts are still the laggard of the housing recovery: they are just 23% of the way back to normal.

Existing home sales also increased, from 4.47 million to 4.62 million. Home sales are nearly halfway back (49%) to their normal level from their worst point during the bust.

The delinquency + foreclosure rate stagnated. (Remember, on this measure, lower is better.) In April, 11.26% of mortgages were delinquent or in foreclosure, versus 11.23% in March, which means that this measure remains 37% back to normal.

Averaging these three back-to-normal percentages together, the market is now 37% of the way back to normal, compared with just 20% back to normal a year ago.

Bottom line: Aside from a dip in March, the recovery is slowly but steadily pushing ahead.