February 27, 2011

Housing Affordability Best in Years

Economists at Moody's Analytics say homes in many parts of the country are at their most affordable levels since before the housing boom took off in 2003, the Wall Street Journal reports.

According to the Journal, housing affordability - comparing home prices to household incomes - has returned to its average levels from 1989 to 2003 in 47 of the major markets included in the report. On a national level, the ratio of median home prices of household incomes has dropped to 1.6 from a high-water mark of 2.3 in 2005.

"Based on incomes, this is as affordable as it gets," Mark Zandi, chief economist at Moody's Analytics, told the WSJ. "If you can get a loan, these are pretty good times to buy."

The paper added that many economists think prices may continue to fall a bit further because of weak demand.

However, qualifying for a mortgage to take advantage of those conditions may not be simple. A survey from Fannie Mae late last year found that more than half of Americans found that getting a mortgage would be difficult.

Tags: home prices, housing, mortgages, Philadelphia Economy

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