This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Housing Market Rises Halfway Back to Normal -- With No Bubble In Sight

Stocks in this article: TRLA

NEW YORK ( TheStreet) -- The housing market is recovering in fits and starts, but at least there's a number helping peg its progress.

That figure is 54% -- the housing recovery percentage from's (TRLA) rating of the housing market's growth from pre-2008 levels. The housing services firm says the 54% represents the housing market's track "back to normal," with the goal of 100% representing a complete recovery.

Based on Trulia's figures, U.S. homeowners are about halfway there, although there isn't a clear path to recovery for now.

According to analyst Jed Kolko, who penned the firm's most recent Housing Barometer report, the 54% figure is down from 56% in March, suggesting that the housing recovery is losing some of its steam.

What's holding up the recovery these days? Kolko points to a number of issues, prominent among them a fallback in home construction starts -- down 16% from March to April, to 853,000.

The good news is that home sales crept up, and foreclosure rates are at their lowest levels since September 2008. Kolko also says that the drop in home construction starts should be temporary.

"The volatile multifamily sector led the decline, dropping 38% month over month. But building permits -- a leading indicator of future starts -- jumped 14% from March, so starts should bounce back soon. For now, construction starts are just 37% of the way back to normal," Kolko says.

The decline to 54% in the Housing Barometer should be only a one-month deal, meaning homeowners can expect to see there was a rebound in May, he says.

Trulia also reports that the recent housing recovery is no bubble.

According to its Bubble Watch, home prices are actually undervalued by 7%, meaning U.S. home values have room to grow. For some perspective, U.S. home prices were overvalued by 39% in early 2006, before the housing crisis swept the country.

"Home prices fell so much after the last bubble burst that they still remain below normal levels even as prices rise sharply today," he says. "Several forces are waiting in the wings that should slow down today's rapid price gains before they rise into bubble territory again. More inventory, higher mortgage rates and fading investor activity would each take home-price gains down a notch."

So it's slow going for the U.S. housing market right now -- but at least it's moving in the right direction.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs