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Housing Projection: 2011 Will Be Third Best Year Ever for Housing Affordability
"You won't know you've seen the bottom until you've missed it". That's what we have been telling homebuyers for the last few years. People come into open houses and tell us they are "waiting for prices to go lower, prices haven't bottomed yet". They said the same thing about interest rates, until recently when it is all but too obvious that interest rates bounced off their most likely bottom. That turn in the rates actually triggered a spike in activity as many buyers came off the fence and started writing contracts.
Actually neither bottom watcher has the right perspective, since the best time to buy involves both price and interest rates. If you are going to change homes, it is the intersection of low prices and low interest rates that represents the best opportunity for housing affordability. It is at this point when more people are in a position to afford homes at every income level.
We still are in the optimum record low-interet rate mortgage environment, at the same time that household incomes remain in a similar relative position. The NAR Housing Affordability Index is at an all-time high, ever since NAR began measuring affordability in 1970. The higher the ... more
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