Although the real estate market is on the road to recovery, it is still far from the healthy levels seen prior to the financial crisis.
Freddie Mac recently outlined what a health market should look like in its November 2012 U.S. Economic and Housing Market Outlook.
In terms of construction, housing starts should be increasing to about 1.7 million to 1.8 million dwellings per year. In 2005, 2.1 million housing starts were completed.
Home sales should be about 5 percent of the housing stock, which would total 6.5 to 7 million homes sold each year. When it comes to home prices, they should appreciate about 3 percent per year.
"What a healthy housing market should look like will dismay those who keep comparing housing to what it was during its peak years," said Frank Nothaft, vice president and chief economist at Freddie Mac.
One of the factors that has been helping the market return to healthier levels has been record low mortgage rates. According to the GSE, fixed-mortgage rates hit new record lows in the week ending November 15.
