A periodic blog dedicated to providing commentary and encouraging debate on topics in Economics and Finance.

About Me

Age: 26 Occupation: Private Equity

Wednesday, May 30, 2007


__k said...

I have an off-topic question.

Approximately a month or 2 ago, you posted an article with a chart of actual vs. fundamental home prices. Where did you find the 2006 income data? I decided to determine Maryland's annual median home prices as compared to median income throughout the housing bubble, but I haven't found income data for beyond 2005.

eternitus said...

___k, I actually started with 2000 median family income and adjusted for wage growth using BLS data(I had the same problem... obviously, when you run into a wall, you have to find a viable work around)

Take the 2005 number and increase it by 3.2%. That's the estimated 2006 median family income (April-April). You can find it on the BLS website.

__k said...

I used annual Q2 numbers, and assumed 5% down payment, a certain fixed property tax rate, and BLS 2005-2006 wage growth numbers. I also used the same mortgage interest rates for Maryland as apply nationally. In 2000, the median Maryland home mortgage payment cost 25% of median pre-tax income. In 2006, that number was 43%.