Today the WSJ.com reports that housing in many markets has returned to affordability levels on a par with levels before the recent bubble. Affordability is a measure of both house prices against average annual family income.
Based on data provided by Moody’s Analytics the Journal reports:
“During the boom, lax lending and speculation pushed house-price inflation far beyond the modest rise in household income. Nationally, the ratio of home prices to annual household income reached a peak of 2.3 in late 2005. But by last September, it had fallen to 1.6, matching the lowest level in the 35 years the data have been collected and well below the historical average of 1.9 between 1989 and 2003.”
The Phoenix area was one of the worst examples of the bubble that people believe started around 2003. With prices sky-rocketing then plummeting back down to earth.
“Based on incomes, this is as affordable as it gets,” said Mark Zandi, chief economist at Moody’s Analytics. “If you can get a loan, these are pretty good times to buy.”
Read the full artice on WSJ.com.
With so much bad news been printed since the housing collapse it’s good to finally hear the normal families can finally afford normal family homes again.