The chart at left is from the cover of today’s WSJ. The accompanying story is about how high-end houses aren’t seeing the burgeoning recovery that other parts of the market are—an idea that feels somewhat familiar. The article itself doesn’t really talk about what the chart shows, but it shows something important: that the next wave of troubled mortgages is likely to come from unexpected places (like loans taken out by the richer among us).
Although… if this week’s issue of Time magazine is to be believed, we might be due for some good news, too. I’ve got a story in there about the housing scene in Boise. Make no mistake, there are still real issues (like slow going for the Obama Administration’s loan modification incentives). But there’s cause for happy, too.
From that magazine piece:
More important than absolute [house] prices is how they relate to what people earn. To gauge housing affordability, the data shop Fiserv compares the cost of houses with household income. By that count, homes nationwide at the end of March were only 7% more expensive than they were in 2000, before the bubble. In some markets — including Phoenix, Atlanta, Las Vegas and San Jose, Calif. — they were actually cheaper. In a way that they haven’t in a very long time, home prices are starting to make economic sense.
You can read the entire story here.
Barbara!