Thursday, January 22, 2009

Is the Housing Crash Just About Over?

There are two reasons to believe this is the case.

First, the Federal Reserve continues to print money at double digit rates. Most assuredly some of this newly created money will find its way into the housing market.

Second, the housing market relative to renting is becomimg affordable.

Economist Irwin Kellner has cranked out some interestng housing related numbers:

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.At the apex of the bubble back in 2006, median home prices sold for about 4.5 times median incomes.

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