More Americans can afford to buy a $200,000 home, at least on paper.

The National Association of Home Builders announced today that 55 million families can afford a $200,000 home when you take into account their incomes, home prices and mortgage interest rates. That’s up from about 38 million families two years ago.

But whether they actually buy is another story. More Americans are at least shopping for a house:

“With affordability up dramatically, reports from our builders in the field indicate that foot traffic in new homes is on the rise and consumer interest is increasing with each passing day. These are encouraging signs that the housing market may be finally reaching a bottom,” said NAHB Chairman Joe Robson, a builder from Tulsa, Okla.

Robson points to low mortgage interest rates and the $8,000 tax credit for first time home buyers. Those are good market conditions.

But I think it may take more than that. People have to feel secure in their jobs and feel like they can take on the financial responsibility (including taxes and insurance) of a house going forward.

April 7, 2009