QUESTION
They say the “affordability index” in San Mateo County is 24%. What does this mean?
ANSWER
Again, this is an index used to compare the San Mateo County with other regions of the country and the state of California. The affordability index measures the ability, based on median income in a certain area, of people to purchase the median priced home, with conventional long-term financing. For example, 24% of people in San Mateo County can purchase a median-priced home with a 30-year fixed rate mortgage at today’s interest rates. That is up from 21% from a year ago. This does not take into account all of the various loan programs available to help people purchase a home using programs that are not traditional 30 year fixed mortgages. There are programs that can help you purchase a home such as FHA and ARM mortgages available. A lending professional can help you find a program that fits your needs. The percentage of buyers who could afford to purchase a median-priced, single-family home in California declined to 58% in the fourth quarter of 2013, down from 69% in fourth-quarter 2012, according to the California Association of REALTORS® (C.A.R.) Housing Affordability Index (HAI).
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