The prices of homes in 20 major cities are starting to stabilize. While the price index of homes increased in late winter, it has also steadied in recent months, at the quickest rate since spring of 2006. And, the National Association of Realtors’ Housing Affordability Index for the year’s first quarter was at the highest it’s ever been

Supply and demand have a lot to do with the stabilization of home prices as well. In the early part of 2006, home price averages were near 2.3 million on an annualized basis. Then, they fell below 500,000 by spring 2009 and have increased back to a little over 700,000 in April. These numbers are still below the rate of household formation, which is near one million

However, any recovery in stable and affordable home prices will still be far from what was deemed economical in the “good old days.” A home price tracker reports that 31% of borrowers are still significantly behind on their mortgages, which means they are unable to sell their homes. And, there is an abundance of homes that are set to enter foreclosure. Household incomes will have to increase when mortgage rates go up in order for home affordability to be consistent

All in all, it’s too early to predict a home purchase boom. But if prices are really becoming more stable and affordable, that does pose a positive financial future for both banks and consumers. And, while some people are reluctant to completely take the word of a real estate agent who is out for profit, the prices of homes--and the individuals who can afford them--will end up telling the real story of purchase potential. After all, numbers don’t lie