Fun with affordability charts

Via CNBC comes two charts which show the level of affordability nationwide and in various markets (San Francisco is not represented but Oakland, San Diego, Los Angeles, and Sacramento are, which you can extrapolate out to cover SF):

The first chart shows the difference in renting versus owning in these markets (how much more or less you'd pay on a mortgage versus rent):



The second chart shows housing cost to income ratio. This is the ratio banks typically use when qualifying buyers. The max was supposed to be around 45%-49% but was much higher in the boom years due to programs like stated-income loans. Now, the raios are much more reasonable, and in many cases (like Sacramento) very reasonable:



The interesting part is how areas which were heavily bubble-induced (Las Vegas, Phoenix, Riverside, Oakland, etc) are under 30%. That's a major change and shows the level of affordability in these areas.

Now if only buyers didn't have to put 20% down payments, the excess inventory in the market would be absorbed faster. Just not back to 0-5% down payments. Can we agree on 10%?

SOURCE: CNBC