Thursday, July 14, 2011

One Newsletter's Take on Housing Affordability

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U.S. Homes: Now the Best Deal in Recorded History

By Dr. Steve Sjuggerud 
Wednesday, June 1, 2011 

Now is literally the best time in recorded history to buy a house in America...
Right now – today – U.S. real estate is the most affordable it's ever been. Ever. 
When I say "affordable," I'm looking at three things: house prices, mortgage rates, and incomes.
With the Affordability Index near 200, the median family has 200% of the income necessary to buy the median home (or more specifically, to qualify for a conventional loan on the median home).
It's easy to see where we are now...
Right now, as you know, house prices are sitting near new lows for this cycle, down by roughly one-third (depending on who's counting). And right now, mortgage rates – after ticking above 5% earlier this year – are all the way down to 4.5% again, near all-time lows.
So it's simple: With the worst house-price crash in American history, combined with the lowest mortgage rates in history, you can now afford more home than ever.
Meanwhile, hope is gone. Everyone thinks housing is hopeless. That is when a bear market ends and a new bull market begins.

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