Analysis of home prices vs income
Using historical data, census bureau for income and NAR for housing prices, from 1968 to 1999, housing prices averaged 2.769 times yearly income. In 2006, housing prices were 4.566 times yearly income. Based on sound lending practices, the median home price today should be around 135,000, but it is currently 206,200 according to the NAR. That should give everybody some idea of where housing prices will go.