What bubble? Housing more affordable, study says

What bubble? Housing more affordable, study says: "CHICAGO -- June 1, 2005 -- Even though home prices are on the rise, research by the Federal Reserve Bank of Chicago reveals that income gains and low interest rates have made housing more affordable than during the previous decade.

Based on the mortgage servicing index created by the Chicago bank's senior economist, Richard Rosen, 15.8 percent of the median household income was necessary to cover the monthly mortgage payment on a median-priced home in 2004 -- which is down from 20 percent needed in the mid-1980s and 18 percent in the early 1990s. Rosen believes a boost in mortgage rates to 6.5 percent would spark a 6.5-percent decline in home prices, further calculating that prices would fall 15.5 percent if rates hit 7.5 percent."