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.0 comments
Trulia’s Chief Economist continues his monthly roundup of new construction starts, existing-home sales and the delinquency-plus-foreclosure rate to see how far away we are from a normal housing market.
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 Truila’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.
Trulia's Chief Economist takes a monthly look at new construction starts, existing-home sales and the delinquency-plus-foreclosure rate to see how far away we are from a normal housing market.
On the long road of housing recovery, we’re all kids in the back seat wondering: are we there yet? After years of bad news about the housing market, it’s hard to remember what “normal” looks like.
This month Trulia kicks off the Housing Barometer, a quick review of three key monthly indicators of housing recovery: new construction starts (Census), existing-home sales (NAR), and the delinquency-plus-foreclosure rate (LPS). For each indicator, we checked how bad the numbers got at their worst, and then looked even further back in time, before the bubble, to remind ourselves what “normal” looked like. We’re not trying to predict what the new normal will be in the future – we’re just eyeballing the past in order to put this month’s housing data into context.
Here’s what the February data, released last week, show:
— Construction starts: 22% of the way back from their low in Apr 2009 toward their normal level.
— Existing home sales: 47% of the way back from their low in Nov 2008 toward normal.
— Delinquency + foreclosure rate: 32% of the way back from their high in Jan 2010 toward normal.
To get to a single number that’s easy to remember and track over time, we just average these three percentages together. If all three indicators were at their worst, the barometer would be at 0%; if all were back to normal, the barometer would be at 100%. The February 2012 data puts us at 34%: in other words, the housing market is one-third of the way back to normal.
So, are we there yet? No. We still have a long way to go. How long will it take us to get there? Using the same method and measures, one year ago the market was 16% of the way back to normal, which means we’ve ticked up 18 points in the past year. If we continue to drive at this same pace of 18 points a year, we’ll get from 34% today to 100% in late 2015. Kids, sit tight…it’s going to be awhile.
Strata 2012 showcases Trulia's interactive data visualizations at the conference's art gallery.
Last week, the Trulia Insights team took a little field trip to Santa Clara, CA (a town south of San Francisco for all our non-Bay Area peeps) to check out Strata 2012: Making Data Work.
All in all, it was an awesome experience and we left feeling a little smarter. But what was even more amazing was seeing our work being showcased at the conference’s data visualization gallery.
We compiled all of our favorite interactive data visuals for a display on a touch-screen monitor.
Watch this video to see the magic of the touch screen and our data visual in action. Just be careful, it might make you a little dizzy.0 comments
According to Trulia’s Housing Misery Index, next week’s Arizona and Michigan primaries could be the last we hear from candidates on housing until California votes in June.
The housing crisis hurt some states especially hard. In those states, like Florida and Nevada, the Republican presidential candidates couldn’t ignore housing. But in states that weathered the housing crisis better, the candidates won’t spend precious money and attention on housing policy.
To see which states are suffering most, we created a Housing Misery Index. Like the original Misery Index, which adds together unemployment and inflation, our Housing Misery Index takes two important indicators of a state’s housing market and simply adds them together. For every state, we add (1) the percentage change in home prices from the peak until today, from FHFA, and (2) the percent of mortgages either severely delinquent or in foreclosure, from CoreLogic.
Why these two indicators? First, big price drops lead to more underwater borrowers and less household wealth, which hurt the housing market and hold back economic recovery. Second, defaults and foreclosures damage consumer confidence in the housing recovery, and foreclosures cause pain not only for people who lose their homes but also for their neighbors.
States That Are Most Miserable When It Comes To Housing
|State||Housing Misery Index|
Note: Index is sum of peak-to-2011Q4 price decline (FHFA) and 2011Q4 delinquency (90+ days) plus foreclosure rate (CoreLogic). Top ten states ranked by the housing misery index are shown.0 comments