Home Affordability Index explained

The Home Affordability Index (HAI), as defined by NAR, measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home based on the most recent price and income data.  In selected markets, we calculate the HAI of every closed listing, and display the median aggregation on a chart.  We source mortgage rate data from the St. Louis Fed on a monthly basis, and combine it with the most recent nominal family income from the US Dept of Numbers (in most cases).

The result is an Index, where 100 = Affordable.   When the index is over 100, homes are MORE affordable.  And when the index is less than 100, home are LESS affordable.  In the example below, home were consistently above 100 (i.e. affordable) until the fall of 2022, when they dipped below 100 for the first time.  After a slight turn back up, the index has been consistently below 100 since early 2023.  Home in this market are currently less affordable for a family making the median income and trying to buy a median priced home.

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