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Affordable Homes Aren't the Only Answer

July 14th, 2008 8:43 AM by Lehel Szucs

Affordable Homes Aren't the Only Answer

Homes are getting more affordable. Families earning the median household income of $61,500 could afford to buy 53.8 percent of all new and existing homes sold nationwide during the first three months of 2008, according to the Housing Opportunity Index released this week by Wells Fargo and the National Association of Home Builders.

That’s up from 44 percent during the first three months of 2007 and the most affordable housing has been since the second quarter of 2004.

While greater affordability is a good thing, it is only part of the answer to the slow housing market, says Richard Dekaser, chief economist for National City Corp. Dekaser says two equally important factors are jobs and the perception that housing is a good investment and prices won’t fall further.

In some areas, concern about falling markets is driving down housing prices further than their logical bottom, says Dave Seiders, NAHB chief economist. He predicts that home sales will be flat through mid-2009 and that home prices will fall another 10 percent before they begin to recover in late 2009.

Source: CNNMoney.com (05/20/2008)
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Posted by Lehel Szucs on July 14th, 2008 8:43 AM

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