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.

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