First-time Housing Affordability in CA Surges
The California Association of Realtors' (CAR) First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. CAR also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.
MP: The chart above (data here, methodology here) shows the quarterly FTB-HAI from the first quarter of 2003 through the fourth quarter of 2008 for California (entire state), and two selected markets (Santa Barbara and San Francisco). In just a little more than a year, the percentage of households who could afford an entry-level home in California went from 24% in the third quarter of 2007 to 59% in the fourth quarter of 2008. For Santa Barbara during the same period, the percentage went from 11% (only 1 in 9) to 55% (more than one in two), and for San Francisco it went from 18% to 47%.
Thomas Sowell: The political meaning of "affordable housing" is housing that is made more affordable by politicians intervening to create government subsidies, rent control or other gimmicks for which politicians can take credit. Affordable housing produced by market forces provides no benefit to politicians and has no attraction for them.