"How bad is it? It's bad, alright. According to the latest GDP data released on Wednesday, the housing sector of the economy contracted at a 27.1% annual rate in the first quarter, making it the 10th worst quarter since records have been kept."
However, he goes on to say the following:
"And guess what? Today home prices have fallen so much, mortgage rates are so low, and personal income is so high — that homes are more affordable today than at any other time, ever — with mortgage payments on the average home eating up about 40% of income. (Keep in mind, disposable personal income is after-tax income; also, this is calculated on an individual basis, not a household basis.)"
Whether or not Luskin is right will be determined over time, what is apparent to me is that there is still a lot to be worked out in housing - specifically the fact that it is still very difficult to get a loan and there are still homes out there that will be coming into the foreclosure process. Having said that, prices have gotten to a point in some places where they are strong buys long term. I'd love to buy my house again at today's prices - instead I get to make a mortgage payment on a home that is underwater.
For the first time since 2000, homes are becoming affordable - now, if only people could qualify for a loan!!