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Housing still unaffordable

Price declines do not cure sticker shock

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Home prices have tumbled from their heights, but their fall still hasn't made much of a dent in the nation's housing affordability woes. In fact, "even with widespread price declines, affordability for would-be homeowners has not improved significantly." That's one conclusion of "The State of the Nation's Housing 2008," a report published earlier this year by Harvard University's Joint Center for Housing Studies. The report received plenty of ink from news outlets, but most of the stories (perhaps rightly) focused on its dire analysis of the current housing crisis and poor outlook for a recovery. The report was also noteworthy for its consistent warning about the sad and sorry state of housing affordability. In theory, lower home prices should have made housing more affordable. But in reality, higher interest rates and homeownership costs have combined with flat wages to make housing less affordable not only for low-income families, but also for many...