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30-year fixed a thing of the past? Affordability index shifts as mortgages offer flexibility.

Publication: San Diego Business Journal
Publication Date: 25-OCT-04 		Format: Online - approximately 1129 words
Delivery: Immediate Online Access

Article Excerpt
The affordability index produced monthly by the California Association of Realtors to show how many--or in the case of San Diego County--how few people can afford to buy a median-priced house may not be an accurate indicator of the number of people finding ways to purchase a home in the local high-priced real estate market.

By the association's latest calculations, only 10 percent of area residents could afford to buy a median-priced San Diego house selling for $579,040 in August.

With that price tag, a family with a 30-year, fixed-rate loan at an interest rate of 5.83 percent and with a 20 percent down payment of $115,808 would need to earn $135,700 per year--more than two times the region's $63,400 median income for a family of four.

However, with the high level of home buying and mortgage lending activity in the region, it appears that more than 10 percent of the county's 3 million residents can afford to buy a condominium or house. Many in the market are...

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