Thursday, 10th of April 2008 at 01:18:08 PMI’ve long known that ASU has a Real Estate Department, but often wish they were more centrally located rather than in the SE part of the valley. I find myself out on their website from time to time just looking around.
This last time I was drawn to the Annual Affordability chart. This chart is rather simple compared to many that I’ve seen in the Real Estate field. It takes into consideration the incomeof residents, interest rate, median sales price and determines the affordability index. Both for Resale and New Builds.
Think about it, depending on how much you make, the interest rate (which determines mortgage payments) and the sales price, we can get a basic index of how affordable a home is compared to other years. So if prices are down and interest rates are down and income is up, then a person can afford more home.
So how do you interpret a Afforability Index. Well, let’s start with the definition:
A measure of the financial ability of U.S. families to buy a house. 100 means that families earning the national median income have just the amount of money needed to qualify for a mortgage on a median-priced home; higher than 100 means they have more than enough and lower than 100 means they have less than enough.
Okay, that gives us information on how to interrupt the number. So anything less than 100, hard to buy, 100 is good, anything over 100 really good. Let’s take a look at the numbers..
Since 2005, both Resale and New Build have been below 100. In 2005 we see a dip where the indexes are 74 and 63 and 2006 they improved to 77 and 70. While this could be indication that we’re starting to return to an affordable state, it’s really hard to say until we are really past it.
Unfortantely the ASU center only does annual reporting (which is pretty far after the fact), they did quarterly, but the last quarterly report was Q3 2006, not much help to us today.
Related posts:
Recent Comments