A local Random Digit Dialing (RDD) survey of recent mover rents was completed for Island County, WA in June, 2006. The result was applied to the FMR for Island County, WA. HUD uses the results of a HUD-conducted local RDD to adjust the FMR if the evaluated rent based on the regular update factor is outside of the 95 percent confidence interval for the forward-trended RDD result.
A monthly change factor is calculated in order to inflate the 2005 Intermediate Rent of $701 to June, 2006 in order to assess the RDD survey conducted in 2006. This is accomplished by taking the 18th root of the normal June, 2005 to December, 2006 update factor of 1.0559 using Local CPI Information.
monthly change = 1.05591/18
monthly change = 1.05590.0556
monthly change = 1.003
The 2005 Intermediate Base rent for Island County, WA is then inflated to June, 2006 using 12 months of growth for use in comparison to the RDD result of $803. The 2006 inflated intermediate rent is calculated as $701 x 1.00312 = $727. The following table enumerates the evaluation of the RDD Result:
| June, 2006 RDD Evaluation for Island County, WA | ||||
|---|---|---|---|---|
| June 2005 Intermediate Rent |
June 2005 to June, 2006 Updated Rent for Comparison |
June, 2006 RDD Result |
June, 2006 RDD Error |
Decision |
| $701 | $727 | $803 | +/-$48 | Is ABS($803-$727)>$48? Is $76>$48? Yes RDD Result Used |
Therefore, the June, 2006 RDD Result of $803 is inflated to December of 2006 using the monthly update factor for 6 months. The 2006 Intermediate rent for Island County, WA is then computed as follows:
= $803 x 1.0036
= $803 x 1.0183
= $818
This yields an effective June 2005 - December 2006 change factor for Island County, WA of $818 / $701 = 1.1669
NOTE: Intermediate figures may not sum due to rounding. Also, update factors presented here may not precisely match the "6/2005 to 2006 Update Factor" on the Final FY 2008 FMR summary page due to rounding of FMRs to whole dollar amounts.
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Problems or questions? Contact Peter.B.Kahn@hud.gov.