U.S. Home Prices Fall to Pre-Bubble Levels 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.

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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.

"Based on incomes, this is as affordable as it gets," said Mark Zandi, chief economist at Moody's Analytics. "If you can get a loan, these are pretty good times to buy."

Though homes have become affordable, an increasing number of people who bought as the market was rising toward its peak are finding that their homes are now worth less than the amount owed on them, also known as being "underwater."

More than a quarter of households with a mortgage were underwater at the end of December, up from 23% in the third quarter, the Journal reported, citing data compiled by real estate website Zillow.com. The increase was attributable to a further decline in home prices and the temporary cessation of foreclosures by banks, which had halted the practice to correct errors in document handling.

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Many seniors today face retirement with less savings and lower home equity value than they expected. Their dreams of selling their home and moving to a more suitable climate or lifestyle may now seem difficult to obtain if not impossible given decreasing home values and challenging economic conditions.

November 28 2013 at 2:28 AM Report abuse rate up rate down Reply

I've dealt with 123 mortgage refi on two refis now, and in each case it was about as painless as anything that involves paperwork by the acre can possibly be. I would heartily recommend his services without reservation for those thinking of refi.

February 10 2011 at 3:43 AM Report abuse rate up rate down Reply

Dear bggdg, As "Foggy Bottom" goons is much too generalized of a reference, I can only agree with you. However, I personally spoke with a principal of one of the preeminent international financial consulting firms, who along with four other equally qualified financial wizards, informed Alan Greesnspan years before the bubble climaxed or burst, informing him that the bubble was forming, how and why it was forming and of the calamities that would ensue if it did form and burst. With informed consent, Greenspan permitted what became the buildup and collapse of the U.S. housing market. Greenspan was a function of the government and during his tenure at the Fed, principally an advocate of business, believing that what was good for business is good for America. Along with "trickle down economics", we have learned that such notions are merely self serving rhetoric. But, I'm sorry that reality seems to be threatening you by challenging your uninformed views.


February 09 2011 at 3:02 PM Report abuse rate up rate down Reply


February 09 2011 at 2:41 PM Report abuse -1 rate up rate down Reply
1 reply to vrsvrs's comment

Prices could drop even further as boomers move on to retirement communities, assisted living and nursing homes. Lots of housing was built for the baby boom generation.

February 09 2011 at 2:41 PM Report abuse rate up rate down Reply
1 reply to kv37's comment

I'd hate to see the bad news, given that home prices continue to plummett.

February 09 2011 at 2:40 PM Report abuse rate up rate down Reply

Lower home prices are arguably better for the public, particularly in light of many years worth of stagnant public purchasing power

However, in light of the fact that it has been evidenced that government negligence, if not outright willful complicity; ala Greenspan in particular, created and destroyed the housing bubble, for the further enrichment of big business, should government not implement a moratorium against all home foreclosures, reductions of all mortgages to current home values (or less); at least until there is unemployment is down to 0, and outright debt forgiveness in every instance of mortgage industry misconduct?


February 09 2011 at 2:27 PM Report abuse rate up rate down Reply
1 reply to vrsvrs's comment

The Foggy Bottom goons did not create and destroy the housing bubble for the enrichment of big business, but rather to social engineer home ownership. The goons know a portion of the populace is sufficiently intellectually incapacitiated so as to believe the absurd promises that the goons can get them a house that they couldn't have gotten absent the goons. So when goons confiscate citizens resources to puhcase or insure mortgates that wouldn't have ever been originated absent the goons interference, the sheeple cheer. Until the inevitable bubble burts. Then the goons write reprots to deflect blame toward anybody but themselves. And the sheeple cheer again.

February 09 2011 at 2:43 PM Report abuse +1 rate up rate down Reply

Who is going to buy a home with a mortgage from one of those banksters. First, if I had to do it all over again. I would go to a small local bank, and get the loan there. It won't be sold, it won't disappear, my payment could be made inside the bank with a nice teller instead of hearing from the customer service call center operator we can't find your payment? Did you send it. Yes we will have to levy fees. Cripes these too big to fail banks can't even debit your account correctly with an EFT what a bunch of morons

February 09 2011 at 1:17 PM Report abuse +1 rate up rate down Reply

No one has a job!

February 09 2011 at 12:46 PM Report abuse +1 rate up rate down Reply
1 reply to captmerit's comment


February 09 2011 at 1:17 PM Report abuse +1 rate up rate down Reply

The greed was everwhere. It was with Wall Street. It was in Washington. It was in our backyards. The one's who got in on it earlier were the winners, whether you were an investor, or Goldman Sach's employees, or a realator, or a builder, or a house flipper, or a seller. The one's who got caught up into in the end....lots of them (rich or poor) lost their arses!

February 09 2011 at 12:42 PM Report abuse rate up rate down Reply
1 reply to Azhot1's comment

And many of us in the last category were simply taking responsibility for making our own housing arrangements, without the means or intention of being an investor. This great complicity was, and continues to be, a great betrayal of the American public.


February 09 2011 at 2:45 PM Report abuse rate up rate down Reply