This is a line many real estate agents and loan officers have used to try to get prospects to buy a home. Sometimes it was true, sometimes not.

So why am I saying it is true now?

According to the California Association of Realtors , in the 2nd quarter of 2006, only 26% of Californians could afford an entry level home. As prices dropped, the number of people who could afford to buy a home increased. Now, with prices as low as they are, home affordability is at the highest point in many years. In fact, in Sonoma County, with the median home price at $274,860 in the 1st quarter of 2012, an estimated 72% of Sonoma County residents can afford an entry level home.

At this point, I don’t see that there will be further decline in prices. As a result, I expect the affordability of homes should decline in the future. I do not expect it to get as low as it was at the peak of the market because I don’t expect prices to skyrocket as they did when you only had to fog a mirror to get a mortgage.

Of course, the current high affordability also helps investors who are looking for rental properties. With lower prices, it makes is much easier to have a rental property with a positive cash flow. And, if you want a rental property, you want it to have a positive cash flow.

Even if you can only qualify for a hard money loan now, it may be a good idea to get what you can with the prices as low as they are. Once you are in (making sure you can afford the payments) get your situation handled so that you can then lock in a long-term low rate.

For more information on housing affordability, you can go to the California Association of Realtors website at http://www.car.org/marketdata/data/ftbhai/.