Nick Timiraos has the affordability index from the National Association of Realtors. The higher the blue, the more screwed the middle class home buyer.But notice something? The blue drops on a trend from Apr 2006 then takes a medium jump down on the crash. That is the home prices declining for two years, before the crash! Yet, oddly oil prices were at their peak at the crash, and oil prices more closely correlated to CPI than house prices.
But, affordability is declining now (blue rising) mainly because of the recent jump in rates, and prices. Why does this seem ominous?
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