Trulia: Housing market inching closer to normal

3 key indicators 56% of the way back to pre-bubble levels

The housing market continued to trudge towards a recovery in March, with rising construction starts and falling foreclosure and delinquency rates bringing market conditions closer to those of a balanced one, according to Trulia’s Housing Barometer.

The barometer summarizes three key housing market indicators — construction starts, existing home sales, and the delinquency-plus-foreclosure rate — looking at how current conditions compare to those recorded at the depths of the housing crisis and those recorded before the housing bubble.

Trulia housing barometer.
Trulia housing barometer.

Trulia noted that while existing home sales dipped slightly from February to March, they were up 10 percent from a year ago. Residential construction posted a 47 percent annual gain in March, and the share of mortgages in delinquency or foreclosure fell to 9.96 percent, down a full percentage point from the same time last year.

As a result, Trulia’s Housing Barometer puts the housing market at 56 percent of the way back to normal in March, compared to 54 percent in February and 33 percent a year ago.

This month’s improvement is even better than it looks, said Trulia Chief Economist Jed Kolko, because of a shift of sales from distressed to conventional and early signs that the inventory crunch may be easing, which would bring some relief to would-be homebuyers.

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