wabmester
Thinks s/he gets paid by the post
- Joined
- Dec 6, 2003
- Messages
- 4,459
When the California Association of Realtors found that their Affordability Index was approaching zero, they decided to do something about the declining affordability of homes in California.
They redefined their index!
The old index told you what percentage of buyers had an income that would let them afford a median-priced home using a fixed mortgage and 20% down payment. When it fell to about 14% for the state and below 10% for some counties last year, CAR killed the index.
The new index says:
* buyers only want to buy homes priced at 85% of the median price
* buyers only want adjustable rate mortgages
* and buyers only want to put down 10%
That brings affordability up to 23% in California! We're saved!
(FWIW, that same index would have been at 60% in 2003.)
CAR Press Release
They redefined their index!
The old index told you what percentage of buyers had an income that would let them afford a median-priced home using a fixed mortgage and 20% down payment. When it fell to about 14% for the state and below 10% for some counties last year, CAR killed the index.
The new index says:
* buyers only want to buy homes priced at 85% of the median price
* buyers only want adjustable rate mortgages
* and buyers only want to put down 10%
That brings affordability up to 23% in California! We're saved!
(FWIW, that same index would have been at 60% in 2003.)
CAR Press Release