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Housing: A Look at "Affordability" Indexes

CalculatedRisk by Bill McBride's avatar
CalculatedRisk by Bill McBride
Sep 06, 2021
∙ Paid

The measures I typically use to compare house prices over time are 1) real house prices (nominal house prices adjusted for inflation), 2) a Price-to-rent ratio, and 3) House prices to median income.

Another measure that is commonly used is an “affordability index”. These indexes calculate affordability based on income and mortgage rates. I’ll prese…

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