Median multiple
The median multiple is used to indicate the affordability of housing in any given community.[1] The median multiple is widely used for evaluating urban markets, and has been recommended by the World Bank.[2][3]
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 severe public policy constraints on land and development.[4]
Table
The International Housing Affordability Survey uses the following table to determine affordability ratings:[5]
| 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
- ^ "Real Estate Bubbles and the "Median Multiple Index"". Ted's Blog. Retrieved 2016-02-13.[permanent dead link]
- ^ "The Housing Indicators Program". World Bank. Retrieved 13 February 2016.
- ^ Angel, Shlomo (2000-10-20). Housing Policy Matters: A Global Analysis. Oxford University Press, USA. ISBN 9780195350326.
- ^ "10th Annual Demographia International Housing Affordability Survey: 2014" (PDF). Retrieved 13 February 2016.
- ^ "12th Annual Demographia International Housing Affordability Survey: 2016" (PDF). Retrieved 13 February 2016.