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Median multiple

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Housing indicator measure of affordability
Housing prices to personal income (per capita) ratios by metro area   Los Angeles   San Jose   Denver   New York   Seattle   Boston   United States average   Dallas   Chicago   Detroit
House price to income ratio   Median house price (left)   House price to income ratio (right)   Median household income (left)

The Median multiple or Median house price to income ratio is a housing indicator used to indicate the affordability of housing in any given community. The Median house price to income ratio WAS the primary indicator H1 of the 1991 World Bank/UNCHS Housing Indicator system. It was subsequently used as a measure of affordability by the UN Commission for Sustainable Development, the National Association of Realtors, State of the Environment 2003 Tasmania; and the Mortgage Guide UK.

The indicator has been popularised by Demographia International, and was called the 'Median multiple' from their second comparative international survey in 2006.

The median multiple is the ratio of the median house price by the median gross (before tax) annual household income. This measure has historically hovered around a value of 3 or less, but in recent years has risen dramatically, especially in markets with public policy constraints on land and development.

Table

The International Housing Affordability Survey uses the following table to determine affordability ratings:

Rating Median multiple
Severely unaffordable 5.1 and over
Seriously unaffordable 4.1 to 5.0
Moderately unaffordable 3.1 to 4.0
Affordable 3.0 and under

See also

References

  1. "Real Estate Bubbles and the "Median Multiple Index"". Ted's Blog. Retrieved 2016-02-13.
  2. "The Housing Indicators Program". World Bank. Retrieved 13 February 2016.
  3. Angel, Shlomo (2000-10-20). Housing Policy Matters: A Global Analysis. Oxford University Press, USA. ISBN 9780195350326.
  4. "Ratio of House Prices to Income". UK's Mortgage Guide. 2017-10-09. Retrieved 2022-05-09.
  5. "2nd Annual Demographia International Housing Affordability Survey: 2006" (PDF). Demographia. 2006. Retrieved 9 May 2022.
  6. "10th Annual Demographia International Housing Affordability Survey: 2014" (PDF). Retrieved 13 February 2016.
  7. "12th Annual Demographia International Housing Affordability Survey: 2016" (PDF). Retrieved 13 February 2016.
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