What Is a Housing Affordability Index?

The Housing affordability index is an index that measures the financial ability of national households to purchase a home.

Housing affordability index

Right!

The Housing affordability index is a measure of the financial ability of a national family to purchase a home.

According to the National Association of Realtors, if the housing affordability index is 100, it means

The American Association of Realtors has two assumptions when calculating the housing affordability index:

The first installment of a residential mortgage is 20% of the house price; the Monthly Principal and Interest (P & I) Payment cannot exceed 25% of the median monthly household income. When calculating the Housing Affordability Index, the Housing Industry Association (HIA) and the Commonwealth Bank of Australia assumed:

The first installment of a residential mortgage is 20% of the house price; the monthly contribution cannot exceed 30% of the median monthly household disposable income; the residential mortgage is a traditional 25-year mortgage.