{"id":25282,"date":"2013-01-10T14:00:40","date_gmt":"2013-01-10T22:00:40","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=25282"},"modified":"2013-01-10T14:41:27","modified_gmt":"2013-01-10T22:41:27","slug":"near-record-affordability-still-driven-by-low-rates","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2013\/01\/10\/near-record-affordability-still-driven-by-low-rates\/","title":{"rendered":"Near-Record Affordability Still Driven by Low Rates"},"content":{"rendered":"<p>It has been a while since we had a look at the local affordability index, and now that we&#8217;ve got all of the data for 2012, it seemed like a good time to take another look.<\/p>\n<p>As a reminder, the affordability index is based on three factors: median single-family home price <a href=\"http:\/\/www.nwrealestate.com\/nwrpub\/common\/mktg.cfm\" title=\"Northwest Multiple Listing Service: (Consolidated) Statistical Recap\">as reported by the NWMLS<\/a>, 30-year monthly mortgage rates as <a href=\"http:\/\/www.federalreserve.gov\/releases\/h15\/data.htm\" title=\"FRB: Federal Reserve Statistical Release H.15 - Historical Data\">reported by the Federal Reserve<\/a>, and estimated median household income <a href=\"http:\/\/www.ofm.wa.gov\/economy\/hhinc\/default.asp\" title=\"Median Household Income, Washington State | OFM\">as reported by the Washington State Office of Financial Management<\/a>.<\/p>\n<p>The historic standard for affordable housing is that monthly costs do not exceed 30% of one&#8217;s income.  Therefore, the formula for the affordability index is as follows:<\/p>\n<div style=\"width: 412px; font-size: 0.8em; text-align: center; margin:0 auto;\"><a href=\"http:\/\/seattlebubble.com\/blog\/2009\/03\/06\/simple-affordability-calculator\/\" title=\"Click for a Simple Affordability Calculator\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2010\/09\/Affordability-Formula.png\" style=\"border:0;\" title=\"Affordability Formula\" alt=\"Affordability Formula\" width=\"412\" height=\"50\"><\/a><\/div>\n<p>For a more detailed examination of what the affordability index is and what it isn&#8217;t, I invite you to <a href=\"http:\/\/seattlebubble.com\/blog\/2009\/08\/27\/what-the-heck-is-the-affordability-index-anyway\/\" title=\"What the Heck is the Affordability Index, Anyway?\">read this 2009 post<\/a>.<\/p>\n<p>So how does affordability look as of December?  Thanks to still-crazy-low interest rates, pretty good:<\/p>\n<p style=\"margin: 5px auto; width: 600px; font-size: 0.8em; text-align: center;\"><a href=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2013\/01\/Affordability-Index_2012-12.png\" title=\"King County Affordability Index\" rel=\"lightbox[25282]\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2013\/01\/Affordability-Index_2012-12-600x435.png\" style=\"border: 0;\" title=\"King County Affordability Index - Click to enlarge\" alt=\"King County Affordability Index\" width=\"600\" height=\"435\" \/><\/a><\/p>\n<p>I&#8217;ve marked where affordability would be if interest rates were at a more sane level of 6%.  The picture is decidedly less appealing in that scenario, but still not dire.<\/p>\n<p>Here&#8217;s a look at the index for Snohomish County and Pierce County since 2000:<\/p>\n<p style=\"margin: 5px auto; width: 600px; font-size: 0.8em; text-align: center;\"><a href=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2013\/01\/Affordability-Snohomish-Pierce_2012-12.png\" title=\"Snohomish \/ Pierce County Affordability Index\" rel=\"lightbox[25282]\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2013\/01\/Affordability-Snohomish-Pierce_2012-12-600x435.png\" style=\"border: 0;\" title=\"Snohomish \/ Pierce County Affordability Index - Click to enlarge\" alt=\"Snohomish \/ Pierce County Affordability Index\" width=\"600\" height=\"435\" \/><\/a><\/p>\n<p>Now if only there were actually homes available to buy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It has been a while since we had a look at the local affordability index, and now that we&#8217;ve got all of the data for 2012, it seemed like a good time to take another look. As a reminder, the affordability index is based on three factors: median single-family home price as reported by the&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"On the blog: Near-Record Affordability Still Driven by Low Rates http:\/\/wp.me\/pe2Bv-6zM","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[8,616],"tags":[28,704,61,223],"coauthors":[],"class_list":["post-25282","post","type-post","status-publish","format-standard","hentry","category-stats","category-counties","tag-affordability","tag-big-picture","tag-fundamentals","tag-interest-rates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Near-Record Affordability Still Driven by Low Rates \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2013\/01\/10\/near-record-affordability-still-driven-by-low-rates\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Near-Record Affordability Still Driven by Low Rates \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"It has been a while since we had a look at the local affordability index, and now that we&#8217;ve got all of the data for 2012, it seemed like a good time to take another look. 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