"Why Housing Hasn't Hit the Skids"

Why hasn't housing hit the skids? According to a 2/19/07 article in Business Week by Peter Coy...there are a few reasons:

1. The 30 yr mortgage rate has remained low due so many lenders fighting for each sale.
2. Income levels have risen as rates have remained low.

Together, they have kept housing affordable even with housing price increases.

Existing home prices are still as high as they were last year and even though sales have declined - only to 2003 levels. Builders are trying to get rid of their remaining inventory before they put up more.

Conclusion...The overstock in inventory could be back to normal by midyear.