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Real estate price declines overshooting fundamentals?

PMI: Income growth has outstripped home-price growth in most states

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Home prices have fallen below fundamental values in more than half of U.S. states, overcorrecting from bubbles in some markets and dragged down by the recession in others.That's the conclusion of analysts at mortgage insurer PMI Mortgage Insurance Co., who warn home prices during the next few years will vary "far more by location than usual."PMI's monthly analysis of economic, housing and mortgage market conditions attempts to tackle the question, "Have house prices fallen by enough to be affordable again?" The answer to that question depends on where you live, PMI analysts said.PMI looked at home prices relative to income at the state level, using 1995 as a baseline. Because of home-price declines during the bust, growth in per capita income has outstripped home prices in 35 states over that time frame. Home prices are trailing income growth by double-digit rates in 30 states, PMI said.States that saw significant price appreciation during the boom but which have ...