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 reported here are for the median income household as well as for a stylized first-time buyer. The Median Income Buyer Housing Affordability Index (HAI) 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 HAI 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 and county as well as for the entire state.
The renter affordability indexes are for the median income household as well as what is referred to as a transitional household, with lower income. The Median Income Renter HAI assesses the affordability of an average-priced apartment for a household with median income. The Transitional Renter HAI 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 and county as well as for the entire state.
The index numbers are updated quarterly. At the county level, the buyer indexes begin with Q2 2009, while the renter indexes begin with Q1 2000. Buyer indexes are provided for all counties and statewide, while renter indexes are provided for counties with significant apartment markets and statewide. For cities, the buyer indexes commence with Q1 2021 and the renter indexes commence with Q2 2014. The city-level indexes are provided for all cities with populations of at least 10,000.
