
Payment affordability is very high by historical standards. That means people who borrow most of the money to buy a home -- which is about 70% of buyers -- the cost of monthly payments is low relative to a borrowers income. But is this a good measure of affordability? A recent paper argues it is not. Further, they argue that affordability is still a major problem hindering demand. [gview file="http://ochousingnews.g.corvida.com//wp-content/PDF/AndrewDavidsonpaper0612.pdf" height="725" width="550" save="1"] I recently wrote about this issue in Record low interest rates fail to spur demand. Interest rates are at record lows, and prices are at or below rental parity in most markets, yet demand is low and sales volumes are weak. Most real estate shills blame intransigent…[READ MORE]