The Housing Affordability Index (at the Median Income of the Lowest-Quartile Households) highlights the housing affordability problems generally faced by severely low-income households across communities. These households are defined here as households whose incomes fall within the bottom quarter of all incomes in the area. The Housing Affordability Index (at the Median Income of the Lowest-Quartile Households) is the percent of the median income of the bottom quartile of households required to occupy the median housing unit including both sold and rental housing. The ratio of median income of the lowest-quartile households to sold housing cost and the ratio of median income of the lowest-quartile households to rent housing cost are each calculated and then weighted by their respective shares of the housing market (the percent of owners and the percent of renters). The sum of the two weighted ratios results in the Housing Affordability Index (at the Median Income of the Lowest-Quartile Households).

 

 

 

The Housing Affordability Index (at the Median Income of the Lowest-Quartile Households) is based on two housing cost components for the period reported. The sold component of the overall HAI measures the percent of the median income of the lowest-quartile of households required for the Principal, Interest, Taxes, and Homeowner’s Insurance (PITI) payment for the median unit sold. The rental component of the overall HAI measures the percent of the median income of the lowest-quartile of households required for the gross rent, including utilities, for the all median units rented.

 

 

The sold component of the Housing Affordability Index (at the Median Income of the Lowest-Quartile Households) answers the question, “What is the percent of the typical household income of households in the bottom quarter of all households that is required to afford the typical bought home?”