Written By : Tim McLaughlin, Weichert Financial

First, on affordability, that was the housing tagline from Moody’s earlier this week. Moody’s came out with an analysis that spoke to the fact that home affordability returned to pre- bubble levels in a growing number of U.S. markets over the past year.

Data provided by Moody’s Analytics tracks the ratio of median home prices to annual household incomes in 74 markets. By that measure, housing affordability at the end of September 2010 had returned to or surpassed the average reached between 1989-2003 in 47 of those markets (64% – most economists believe the housing boom took off in 2003).

During the boom, lax lending and speculation pushed house price inflation far beyond the modest rise in household income. Nationally, the ratio of home prices to annual household income reached a peak of 2.3 in late 2005. But by last September 2010, it had fallen to 1.6, matching the lowest level in the 35 years the data have been collected and well below the historical average of 1.9 between 1989 and 2003.

“Based on income, this is as affordable as it gets,” said Mark Zandi, chief economist at Moody’s Analytics. “If you can get a loan, these are pretty good times to buy.”

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Regarding “Housing Reform”, the Treasury Department released its well anticipated “Reforming America’s Mortgage Finance Market” report to Congress earlier today. The report touches on the future of housing finance and outlines three options with various levels of Government support. However, the final plan will take years to develop, and the outcome will shape the future of the mortgage markets, including liquidity and home affordability.