US Housing Market At 32%What It Was Pre-Bubble
Real-estate website Trulia figures that the national housing market is 32% of the way back to normal, according to its most recent monthly housing barometer.
“Normal” is defined as “the rough estimate of the long-term pre-bubble average,” said Jed Kolko, chief economist and head of analytics at Trulia. To come up with the calculation, he considers a few measures, including construction starts, existing-home sales, and delinquency and foreclosure rates.
Construction starts rose 7% in June, compared with the month before and 24%, compared with the year before; Kolko figures that starts are about 28% of the way back to normal.
But sales of existing homes fell to an annualized 4.37 million in June, down from 4.62 million in May; that brings sales about 35% of the way back to normal from their worst point during the housing bust, according to Trulia. And the delinquency and foreclosure rate rose in June, with 11.23% of mortgages delinquent or in foreclosure, compared with 11.08% in May; that brings the delinquency and foreclosure rate 34% back to normal, Kolko said.
Trulia isn’t the only real-estate website to make observations about the market this week. Zillow declared earlier this week that home prices have found their bottom, and predicted price increases for the year ahead. Read more about that in this week’s Real Estate pages, plus learn why it may be time to consider a 15-year fixed-rate mortgage and read a Realty Q&A about why a 40-year mortgage might not be the best idea.
Kolko’s estimates suggest we’re only a fraction of the way back to a more normal market — an important point to keep in mind while digesting all the housing market reports that are released.