WSJ says “Housing Crisis is Over”
The Wall Street Journal publish an opinion article The Housing Crisis Is Over [5/6/08] earlier in the week, which said in part…
The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.
and continues…
Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.
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.
Homes really are affordable again, and I’ve seen homes in some neighborhoods down considerably. There are many more single family homes in Central Palm Beach County available now for less than $100,000 than there were in 2004.
Hopefully we see some further changes in the market this year that prove the writer’s point.