When it comes to analysis of the single-family housing market, it is one thing to discuss construction and sales. But to truly know what is going on with the housing market, an understanding of affordability is important. The U.S. Housing Affordability Index (HAI) is an important tool in this endeavor, as it shows whether families can afford to buy homes.
An index value of 100 indicates that a family earning the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that the family earning the median income has more than enough income to qualify for a mortgage on a median-priced home, assuming a 20% down payment and a qualifying ratio of 25%.
Read more...Housing Affordability Falls, Signaling an Increase in Housing Supply