The housing market is now two-thirds of the way back to normal, according to Trulia’s (TRLA) latest Housing Barometer report. While existing-home sales have finally found their way back to normal levels, construction activity continues to lag.
“The recovery is not a straight line: it moves through different phases,” said Jed Kolko, Trulia’s chief economist.
The current phase for pending home sales shows a drop in August sales as the market remains impacted by tight inventory, rising interest rates, escalating prices and tighter mortgage lending guidelines.
The National Association of Realtors’ pending home sales index took a slight dip in August, falling 1.6% from an index score of 109.4 in July to 107.7 in August. Nonetheless, August’s numbers were still 5.8% above August 2012 levels, when the index score hovered at 101.8.
The national median existing-home price is expected to rise 11% to 12% in 2013, easing to an increase of 5% to 6% next year, with general improvement expected in inventory supplies.
“Moving forward, we expect lower levels of existing-home sales, but tight inventory in many markets will continue to push up home prices in the months ahead,” said Yun.
If it’s any indicator as to how far the housing market has come, it’s now 67% back to normal, Trulia claimed.
“When we created the Housing Barometer eighteen months ago, all measures of the housing recovery were far from normal,” said Kolko “Since then, the recovery has surged ahead in many ways but languished in others. Existing home sales are 99% back to normal, while construction is just 40% back to normal. Tracking the recovery’s progress as a single number is not the best approach anymore.”