Since early 2007, housing has experienced a prolonged slump in prices. This study investigates the state of housing markets across the United States as of June 2011 and finds that housing is undervalued in almost all markets. Two housing affordability measures (price-to-income ratio and mortgage payment-to-income ratio) show ownership is less costly today than during most of the nation's recent past. Additionally, a buy versus rent analysis suggests that ownership rather than renting is the preferable housing tenure choice from a financial standpoint in the majority of American real estate markets. These findings combine to indicate the presence of near term unprecedented opportunities for home ownership. [PUBLICATION ABSTRACT]
Journal of Housing Research
Beracha, Eli; Skiba, Hilla; and Hirschey, Mark (2012). "The Ship Appears to be Turning." Journal of Housing Research 21.2, 261-280.