Housing Affordability Index
A multi-dimensional measure of housing accessibility
Motivation
Traditional affordability measures like the price-to-income ratio or the NAR's Housing Affordability Index provide useful but incomplete pictures. They don't account for factors like commute costs, property taxes, insurance, or the quality-adjusted value of housing.
## Methodology This project develops a multi-dimensional Housing Affordability Index (HAI) that incorporates: - **Housing costs**: Purchase price or rent, mortgage rates, down payment requirements - **Non-housing costs**: Property taxes, insurance, HOA fees, utilities - **Transportation costs**: Commute time and cost to major employment centers - **Income dynamics**: Wage levels, wage growth trends, income distribution - **Quality adjustment**: Square footage, age, condition, amenities ## Results The index reveals that some traditionally "affordable" markets become less so when transportation costs are included, while some "expensive" markets offer better value on a quality-adjusted basis. ## Applications - City-level policy evaluation - Investment market screening - Consumer decision support - Academic research on housing accessibility
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