In today’s Daily Data Discussion post we’re going to look at markets around the country that have the highest Housing Affordability Index values. 

Yes, we know there are some rationale criticisms of the housing affordability index (HAI), and have in fact written about many of the criticisms of the tool in the August issue of our newsletter – The Emerging Market Report. 

Perhaps the most commonly cited criticisms include the HAI’s use of median income and median home price measures in its calculation; other commentary assails the tools use of financing assumptions that in all likelihood don’t apply to the home financing world of today.  We don’t have space to address all the current criticisms of the HAI in this blog post; perhaps we’ll run some of those over the next few days if there is indeed sufficient interest in doing so. 

To make sure we are all on the same page, we define the HAI as follows –

The concept of housing affordability in most venues refers to the capacity to purchase a single family dwelling (home or condo), which critically revolves around the ability to qualify for the purchase mortgage. The Housing Affordability Index is further based upon the ability of the median-income earning family to purchase the median-priced, existing home in a given market, using standard and conventional financing guidelines.

A Housing Affordability Index of 100 represents that the median family income for the market is precisely equal to the income a conventional lender would require for the family to purchase the median-priced home in the market. A value less than 100 indicates the median family income for the market is insufficient to qualify; a value over 100 indicates the median family income for the market is more than enough to buy the median-priced home (or the family can afford a home price above the median priced home in the market. 

Here are the markets in our database as of today with the highest Housing Affordability Index values –

1)  Fayetteville, NC  166.4
2)  Temple – Belton, TX  166
3)  Killeen, TX   160.3
4)  Buffalo, NY   156.8
5)  Lawton, OK   153.7

Database Average:  112.4
Database Median:  113.2

Tomorrow we’ll take a look at markets around the country with the lowest Housing Affordability Index values. 

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