Trulia's Housing Barometer: Recovery Slips Backward in March

What does a "normal" housing market look like, and how far away are we? To figure this out, each month Trulia's Housing Barometer summarizes 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.

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

---Construction starts slipped in March. The decline in annualized starts from 694,000 to 654,000 pushed starts from 21% of the way back to normal in February down to just 17% in March.

---Existing home sales also slipped, from 4.60 million to 4.48 million. Home sales fell from 48% of the way back to normal in February to 41% in March.

---The delinquency + foreclosure rate improved. (Remember, on this measure, lower is better.) In March, 11.23% of mortgages were delinquent or in foreclosure, versus 11.70% in February, which means that this measure improved from 32% back to normal in February to 37% in March.  As we learned from Trulia's December 2011 consumer survey, this is key for consumer confidence: 47% of Americans said fewer defaults and foreclosures would give them confidence that the housing market is getting back on track -- more than any other indicator of recovery.

Averaging these three back-to-normal percentages together, the market is now 32% of the way back to normal. That's a bit lower than in January and February, when the market was 34% of the way back to normal, but still higher than it was in 2011. In fact, the market was only 23% of the way back to normal this time last year.

Bottom Line: The housing recovery is progressing, though it's taken one step backwards after a few strides forward.

 

Follow Jed Kolko on Twitter: www.twitter.com/JedKolko

Comments

[KarmaPatrol]

11:55 AM on 04/26/2012

I wonder about the median square footage and different building material/technology of new homes. Plus a preference for closer neighborhoods with walkability. It's pretty obvious we can no longer take cheap energy for granted, so the older homes of stucco and drywall may need to stay down in price til they are bulldozed (unless they become a shelter for undocumented workers, sleeping 24 to a regular home).

[ruolivert]

10:25 PM on 04/25/2012

Every house in the country is over valued. Every thing in this country is over valued. You have way too hard to put a roof over yourself and that's because everything is so expensive. When do we seriously talk about our currency since its the one things that links everything we need to survive, besides the government

[Christopher Hull]

04:42 PM on 04/25/2012

A fine article that doesn't really explain anything.
Thank God for Wikipedia.
"The mania finally ended, Mackay says, with individuals stuck with the bulbs they held at the end of the crash—no court would enforce payment of a contract, since judges regarded the debts as contracted through gambling, and thus not enforceable by law." Of course this is from the section on the Tulip Mania of the 1600's.
This is the ultimate problem. You had workers borrowing ten, twenty, thirty (or more) years of earnings so they could afford a home. A home in a decent school district, etc. When this bubble bursts rather than finding a mechanism to reset prices quickly smoothly and efficiently we have instead bumbled and fumbled along still trying to prop up unreasonable prices so the bankers "contracts through gambling" on the housing market will be enforced.
Address that issue and not the fancy charts that explain nothing.

[walstir]

09:32 PM on 04/25/2012

Life is a gamble. You are gambling that this isn't your last day on earth - otherwise you wouldn't be wasting it posting on the web. Try not paying your bills on your next trip to Vegas or not paying the government its taxes on your gambling winnings and you will quickly find out how enforceable by law those obligations are.

[Christopher Hull]

04:08 PM on 04/26/2012

But you are comparing apples to asteroids. Yes every day is a gamble and if I owe taxes or bills I pay them.
However, there are exceptional economic situations (like the Tulip Mania) that unless they are addressed bring down the entire economic system.
I am not advocating for people not paying their debts. I am saying that a system should be put in place to REVALUE the real estate at a logical price based on median income of the labor force, etc.
To enforce contracts that the banks KNEW were bad that they specifically blew up the bubble and then bet on the bursting of that bubble there needs to be a reset.

[spinotter11]

03:44 PM on 04/25/2012

Brave and foolish statistics that say nothing about a recovery. Not happening.