The Housing Crisis Is Over - WSJ.com
Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.
This is just more of the usual rah-rah bullshit from the WSJ, always jawboning economic blemishes into invisibility.
What this article misses is that the “housing boom” didn’t occur nationally. It occurred locally, in major urban areas. Places like my home town, Muncie, IN, had a high affordability rating right through the boom. It was places like my current hometown, San Francisco, where affordability plunged to levels like 12 percent. And it’s still low. In fact, it remains quite low for most of California.
We are still in the earlier stages of the great housing bust. Two years from now, re-read this article, and have a good laugh at the author’s expense.
