While an August report from Capital Economics states that housing values are undervalued by 20 percent, Zillow reports that many metro price-to-income ratios are still above their historic averages. The current price-to-income ratio for the U.S. is 3.3-14 percent above the historical average, according to new research from Zillow.
According to Zillow’s chief economist, Stan Humphries, “more often than not, home values will eventually come back in line with incomes, according to the historic norms of that market.”
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