Housing

There were sighs of relief on both Wall Street and Main Street when Federal Reserve Ben Bernanke told Congress this week that he expects interest rates to stay low for an extended period. The news is especially welcome in the housing market, where low rates are key to a sustained recovery.

In two separate hearings, Bernanke signaled the Fed’s intentions to keep rates low. In testimony before the Senate Banking Committee today, he said the weak economy justified the low interest rates. He made similar comments yesterday in testimony to the House Financial Services Committee.

Earlier this month, the Fed raised the rate it charges banks for short-term loans. Even though that increase had been expected, there were concerns that the central bank might increase other rates as well.

“Even though nothing he said was particularly new, it was just enough to calm the ruffled feathers that were out there,” Jim McDonald, chief investment strategist at Northern Trust in Chicago told the Associated Press.

Today CNNMoney.com released an article on housing affordability entitled “You don’t have to be a millionaire to buy a house.” Is it true?

According to the NAHB and Wells Fargo, 70.1% of all U.S. homes sold during the 3Q were affordable for the typical American family. (Typical, in this study, means a median income of $64,000.) This percentage was a significant rise from the 56.1% which qualified one year ago.

Many buyers have already taken advantage of these low housing prices, which are further discounted by the federal tax credit and low interest rates. Others, however, have procrastinated. To those folks CNN writes, “Now is a good time to buy.”

To read more, visit CNNMoney.com.