Buying a home has become a confusing process over the last couple years, but lately the biggest purchase decision of your life has become simpler. Due to sharp home price drops, home affordability is in a great place. David Schepp of our sister site, DailyFinance.com, explains why now may be a great time to buy.
The drop in home values caused by the mortgage crisis has resulted in at least one positive outcome: Prices have fallen so far and so fast that home affordability is back to pre-housing boom levels, according to a new report.
After reaching a peak in late 2005, the ratio of home prices to annual income fell to its lowest levels in 35 years last September, according to data compiled by Moody's Analytics, which tracked median home prices and annual incomes in 74 markets.
By that measure, housing affordability at the end of September had returned to or surpassed the average reached between 1989-2003 in 47 of those markets,The Wall Street Journal reported, noting that most economists believe the housing boom took off in 2003.