Affordability is considered to be a HOAM (Homeownership Affordability Monitor) index value greater than 100, or when all of the monetary components of the cost of housing are greater than 100. Housing Affordability Index (composite): Measures the degree to which a typical family can afford the monthly mortgage payments for a typical home. The U.S. Fixed Housing Affordability Index The U.S.
is at the current level of 93.30, compared to 93.50 last month and 93.70 a year ago. This represents a change of -0.21% compared to last month and -0.43% compared to to the previous year. A HOAM index value of less than 100 indicates that the average household income is insufficient to cover the annual costs of owning a mid-priced home (the cost of housing is more than 30 percent of income). This tool analyzes whether a household that earns the average income in its area can afford to own a home that costs the average price of homes in that area.
The CHI is a useful tool, especially for state and local homebuilder associations, to more easily convey to local authorities the burden of housing costs for middle- and low-income families in their markets. An index of 100 or more indicates that the median household income is sufficient to cover the annual costs of owning a medium-priced home (the cost of housing is less than 30 percent of income). The current mortgage interest rate is the effective rate of closed loans for existing housing by the Federal Housing Finance Board. It measures whether a family earning the national median income can afford the monthly mortgage payments for an existing mid-priced single-family home.
The heat map on housing affordability prepared by ATTOM Data Solutions and the RealtyHop housing affordability index, to name a few. If a household earns less than the median income, then owning a mid-priced home in that area would not be affordable, regardless of whether the HOAM index indicates that an area is affordable. To help economists and business analysts track relative changes in homeownership affordability at a higher frequency and at a more granular geographic level, the Atlanta Federal Reserve developed an interactive housing affordability tool, the HOAM (Homeownership Affordability Monitor) index, which measures the ability of a household with an average income to absorb the estimated annual costs associated with owning a mid-price home.
