The Housing Affordability Index value in the United States plummeted in 2022, surpassing the historical record of 107.1 index points in 2006. In 2022, the housing affordability index measured 103.8 index points, making it the worst year for homebuyers since the start of the observation period.
What does the Housing Affordability Index mean?
The Housing Affordability Index uses data provided by the National Association of Realtors (NAR). It measures whether or not a family earning the national median income is able to afford the monthly mortgage payments on a median-priced existing single-family home. An index value of 100 means that a family has exactly enough income to qualify for a mortgage on a home. The higher the index value, the more affordable a house is to a family.
Key factors that drive real estate market
Three main factors can affect the power of house-buying consumers: income, house prices, and mortgage rates. When incomes increase, consumer power also increases. The median household income in the United States declined 2022, affecting affordability. Additionally, mortgage rates have been on an upward trend, adding to the financial burden of homebuyers. The sales price of existing single-family homes in the United States has increased year-on-year since 2011 and reached 393,000 U.S. dollars in 2022.
Housing affordability index (fixed) in the United States from 2000 to 2022
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The affordability index is the ratio of median family income to qualifying income. Values over 100 indicate that the typical (median) family has more than sufficient income to purchase the median-priced home.
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US Department of Housing and Urban Development. (September 28, 2023). Housing affordability index (fixed) in the United States from 2000 to 2022 [Graph]. In Statista. Retrieved June 18, 2024, from https://www.statista.com/statistics/201568/change-in-the-composite-us-housing-affordability-index-since-1975/
US Department of Housing and Urban Development. "Housing affordability index (fixed) in the United States from 2000 to 2022." Chart. September 28, 2023. Statista. Accessed June 18, 2024. https://www.statista.com/statistics/201568/change-in-the-composite-us-housing-affordability-index-since-1975/
US Department of Housing and Urban Development. (2023). Housing affordability index (fixed) in the United States from 2000 to 2022. Statista. Statista Inc.. Accessed: June 18, 2024. https://www.statista.com/statistics/201568/change-in-the-composite-us-housing-affordability-index-since-1975/
US Department of Housing and Urban Development. "Housing Affordability Index (Fixed) in The United States from 2000 to 2022." Statista, Statista Inc., 28 Sep 2023, https://www.statista.com/statistics/201568/change-in-the-composite-us-housing-affordability-index-since-1975/
US Department of Housing and Urban Development, Housing affordability index (fixed) in the United States from 2000 to 2022 Statista, https://www.statista.com/statistics/201568/change-in-the-composite-us-housing-affordability-index-since-1975/ (last visited June 18, 2024)
Housing affordability index (fixed) in the United States from 2000 to 2022 [Graph], US Department of Housing and Urban Development, September 28, 2023. [Online]. Available: https://www.statista.com/statistics/201568/change-in-the-composite-us-housing-affordability-index-since-1975/