AFFORDABILITY INDEX

Just a few short years ago the affordability index for San Diego was dismal. The affordability index measures the percentage of households that can afford to buy the median priced home based on the median income. The affordability index reached an all time low for the San Diego area in the 4th quarter of 2005. At that time it stood at 3.6%. That meant at the time only 3.6% of households could afford the median price home based on the median income at that time. As of the 4th quarter 2008, the affordability index stood at 44.6%. That is still low compared to other areas of the United states, but it is a vast improvement. It should continue to improve. This all means that more and more households will not be shut out of the market. This chart (xls) shows the current index for most areas of the U.S, The next chart (xls) shows the history of the index for most areas. Scroll down until you reach the San Diego area. The bottome line is the housing market continues to improve for buyers.