Home prices are rising rapidly in many markets, but Pacific Coast Builders Confidence attendees name two main factors that should quell fears of a new bubble.
“The ultimate reality check is affordability,” Ara Hovnanian, chief executive of homebuilding giant K. Hovnanian Enterprises, told The Wall Street Journal.Home prices soared during the housing boom, making homes less affordable for families earning the median income. The National Association of REALTORS®’ affordability index fell to 107.6 in 2006—often considered the height of the housing bubble. But following the housing crash, housing affordability rose (the higher the index, the greater the affordability). In 2008, the index climbed to 137.8, and reached a high of 193.2 in 2012, according to NAR. Inventory on the Rise as Sellers Gain Confidence
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