While at it’s best levels since record keeping began the Housing Affordability Index may not be a well known Index.
The NATIONAL ASSOCIATION OF REALTORS® affordability index measures whether or not a typical family could qualify for a mortgage loan on a typical home. A typical home is defined as the national median-priced, existing single-family home as calculated by NAR. The typical family is defined as one earning the median family income as reported by the U.S. Bureau of the Census. The prevailing mortgage interest rate is the effective rate on loans closed on existing homes from the Federal Housing Finance Board. These components are used to determine if the median income family can qualify for a mortgage on a typical home.
To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. For example, a composite HAI of 120.0 means a family earning the median family income has 120% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home. An increase in the HAI, then, shows that this family is more able to afford the median priced home.
The calculation assumes a down payment of 20 percent of the home price and it assumes a qualifying ratio of 25 percent. That means the monthly P&I payment cannot exceed 25 percent of the median family monthly income.
Monthly Housing Affordability Index
Monthly Housing Affordability Index for printing (PDF: 61K)
Monthly Housing Affordability Index for database work (Excel: 32K)
Quarterly Housing Affordability Index
First-time Homebuyer Affordability for printing (PDF: 15K)
First-time Homebuyer Affordability for database work (Excel: 28K)
Metropolitan Housing Affordability Index
Metro Affordability 4th Quarter 2011 for printing (PDF: 10K)
Metro Affordability 4th Quarter 2011 for database work (MS Excel: 20K)
For historical home sales and price information, send an e-mail to firstname.lastname@example.org.
Reprinted with permission: National Association of REALTORS