House-Poor Families and Long Commutes

Commenting on the most recent Case-Shiller Index number, Mark Hanson writes:

"As prices increase and affordability decreases, sales volume will slow. Unless something is don to increase affordability for first-timers and move-up buyers, house prices will become volatile. This is why we think the next phase in this housing cycle involves introducing increased 'leverage-in-finance,' but not the same way as in 2008. Rather, by using data and analytics to drive better, non-FICO driven risk underwriting and segmentation and non-aggregated pricing. Also, get ready for HELOC-MANIA."



  According to Cornerstone Advisors partner Steve Williams:

"There is an interesting dynamic out there. Home prices are rising in hot metro markets with very low unemployment. But the demand for labor is not resulting in high enough compensation to stay even on affordability. This could pose an ultimate limit to home price appreciation, but in the near term it just means a boat load of house poor families and long commutes for professionals around metro markets."