Homes More Affordable, but Don’t Expect a Rebound
Despite a flurry of positive data on the housing sector, it’s still too early to bank on a comeback.
Palm Coast, FL – February 9, 2011
Home affordability has returned to pre-bubble levels, making it perhaps one of the most sensible times in years to buy a home. In 47 of the 74 markets tracked by Moody’s Analytics, housing affordability has returned to or surpassed the average reached between 1989-2003.
Nationally, at the end of September (the latest data available), the ratio of home prices to annual household income had fallen to 1.6, well below the historical average of 1.9 between 1989 and 2003 – the year that lax lending and heavy speculation helped the housing boom take off. Certainly this is a positive development, laying the foundation for a housing recovery.
But will a return to affordability spur a home-buying frenzy?
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