Yes, home prices are falling in virtually all major metropolitan areas. There's no question about it.

Unfortunately, buyers looking to cash in on those lower prices may have to postpone their dream of home ownership a little longer.

Call it the American Dream Deferred.

And it's not just because of tight credit.

Higher gas prices, higher food prices and the still high cost of shelter are all taking a toll on the American Dream.

After nearly two years of falling home prices, incomes still just are not a match for the cost of housing.

That's one of the major findings in the grim "2008 State of the Nation's Housing" report from the Joint Center for Housing Studies at Harvard University.

From the beginning of the housing boom in 1999, to 2006, when prices peaked, home owner incomes actually declined about 1.5 percent as home prices skyrocketed by 48 percent.

At current interest rates, the national median home price would have to fall 12 percent from the end of 2007 to make housing even as affordable as it was in 2003, according to the report.

That's not likely. Not only are interest rates up slightly since December 2007, so is the median price of homes -- believe it or not -- by 1 percent.

Before buyers can really return to market in droves, incomes, home prices and mortgage rates will have to cooperate. And even if they do, tight credit stands in the way of all but the most creditworthy home buyer.

The Harvard report says in 40 metros, prices would have to drop by more than 25 percent to roll back affordability levels to 2003.

During the housing boom, the dramatic run-up in home prices was fueled by buyer access to cheap financing and lax underwriting. That combination allowed borrowers to negotiate more competitively. And that, of course, drove up prices beyond true income-based affordability levels.

Is there a silver lining?

Yes. If you have good credit and can migrate to an already affordable market where home prices haven't skyrocketed, you've got a shot.

Published: July 8, 2008

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.