Housing Affordability Index

By reviewing this graph, you will note that before the great recession, housing affordability has been trending up. From ’07 – ’11 shows a dramatic increase in housing affordability primarily based on the dramatic decrease in housing prices, ample supply, and historic low interest rates. In my opinion, the affordability index is reaching its own “bubble” and the pendulum will swing past normal levels due to increased demand, reduced supply and higher interest rates. The fluctuation in these trends is due in part to less than focused national policy and debate on housing issues. The rebound would then situate affordability in the band of normal expectancy.

Bottom line is affordability in real estate is at an all time high and will never be this high again in our life time. It is time to buy real estate. Act rather than react.