Could the housing correction be close to an end?

MarketWatch chief economist Irwin Kellner explains why the housing correction is likely to be nearing the end. And unlike what you'll hear from some real estate agents, it isn't just happy talk designed to make you buy. He writes:

Nationwide, prices of new and existing homes are now only about 7% away from being as affordable as they were during the 1980s -- when the housing market was booming. At that time, median home prices equaled 2.9 times median household incomes.

His logic makes sense: During the real estate bubble, home prices sold for around 4.5 times the median household income. When you combine the newfound price affordability with the low interest rates (even after the past week's jump) that make payments affordable, it seems that home prices are starting to actually make sense in terms of how much people earn.

Another reason to think we're close to the bottom is that the banks appear to have over-corrected for their past sins related to sloppy lending standards. Getting a mortgage right now is tougher than it's been in a long time and if it gets a little bit easier over the next few years, that could lead to more buying.

It seems unlikely that prices will touch the heights they reached a few years ago for many, many years, but if you can find a home to buy for less than it costs to rent, this might be a good time to do it.