I wouldn’t say we are at the bottom when home prices and and incomes match up, we will only be at the fundamentals, house prices could and probably will (who am I kidding, just look at the graph, of course they will!) drop below the fundamentals before they hit bottom. Look at Rich’s graphs of historical price/income ratios:
They go well below the historical averages on their way down from even minor ‘bubbles’, I can’t imagine a different outcome this time, except most likely more severe.
It seems like home ownership rates would be a laggy indicator and tough to figure out at this point. How do you know if it’s hit it’s historical average that another wave of foreclosures won’t hit and push it well below the average.
