Each month, Trulia’s Housing Barometer charts how quickly the housing market is moving back to “normal.” We summarize three key housing market indicators: 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.
In February 2013, all three measures held steady or improved:
Construction starts notched up. Starts were at a 917,000 annualized rate, up 0.8% month-over-month and up 28% year-over-year. Aside from a December spike in construction, February starts were at the second-highest level since July 2008. And 31% of February construction starts were in multi-unit buildings–compared with the typical level of 20%. Construction starts are now 43% of the way back to normal.
Existing home sales also increased. Sales rose slightly to 4.98 million in February from 4.94 million in January. Year-over-year, sales were up 10%. Excluding distressed sales, conventional home sales were up 25% year-over-year in February. Importantly, inventory–which has been very tight and could hold back sales–rose almost 10% in February, which is a bigger jump than the typical seasonal increase. Overall, existing home sales are 70% back to normal.
The delinquency + foreclosure rate dropped. The share of mortgages in delinquency or foreclosure dropped from 10.44% in January to 10.18% in February, and is now at its lowest level since October 2008. The combined delinquency + foreclosure rate is 46% back to normal.
Averaging these three back-to-normal percentages together, the housing market is now 53% of the way back to normal, up from 51% in January. One year ago, the market was 33% back to normal. At this rate of recovery, “normal” won’t come until late 2015. Despite sustained improvement on every indicator, the housing market still has a way to go. The trend is up, but the road is long.
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