City Housing Affordability Indexes

There are a variety of ways to assess housing affordability. The most precise methods recognize the range of housing costs and household incomes as well as the costs of other essential goods and services, including transportation. These methods require detailed household survey data that is not available with the frequency and timeliness required to support regular reporting of affordability measures. Consequently, we use simpler methods that are based on data that are collected or estimated frequently. In particular, we rely on median house prices, average apartment rents, and median household incomes to produce a set of indexes of the cost of homeownership and renting.

The homeownership affordability indexes are for the median income household as well as for a stylized first-time buyer. The Median Income Buyer Index assesses the affordability of a median-priced house for a household with median income with a typical down payment and a 30-year mortgage. The First Time Buyer Index assesses the affordability of a house at 85% of the median price for a household with 70% of the median income and a reduced down payment. The median prices and incomes are calculated for each city.

The rental affordability indexes are for the median income household as well as what is referred to as a transitional renter. The Median Income Renter Index assesses the affordability of an average-priced apartment for a household with median income. The Transitional Renter Index assesses the affordability of an average-priced apartment for a household with 70% of median income. Again, the average prices and median incomes are calculated for each city.

City Housing Affordability Indexes