Housing Even More Affordable Now

The Arizona Republic reports that low interest rates and rising incomes have made houses more affordable than they were 10 years ago, suggesting talk of a national real estate bubble may be exaggerated, a study by the Federal Reserve Bank of Chicago said. It took less than 16 percent of the median household's income to cover the monthly mortgage payment of a home with the median sale price last year, the study states. That compares with 20 percent in the mid 1980's and 18 percent in the early 1990's. But Fed Chairman Alan Greenspan states, "It's pretty clear that it's an unsustainable underlying pattern. People are reaching to be able to pay the prices to be able to move into a home. While we don't perceive that there is a national bubble, it's not hard to see that there are a lot of local bubbles." More...