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.
3 Comments:
"Affordable housing produced by market forces provides no benefit to politicians and has no attraction for them. "
a large part of the current "affordability" is due to record low interest rates. these low interest rates are mostly due to actions of the federal reserve. so, while it may not be politicians, it also may not be all market forces either.
I think another reason this doesn't qualify as "affordable housing" in the political arena is that only people with a significant down payment and good credit are currently able to get a mortgage.
Politicians don't like those restraints being placed on who gets a house and who doesn't.
uh, that's great except that housing is highly insensitive to price. You simply cannot bring that much demand just by dropping prices. It requires both securing credit, which is now harder, and often it also requires a contingent transaction; the buyer selling their existing home. That's why the supply of houses on the market isn't moving. There also remains a massive disconnect between owner-offered versus REO properties on the market.
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