Real Estate Term of the Day: Housing Affordability Index
HOUSING AFFORDABILITY INDEX – a statistical indicator of the ability of households in an area to purchase housing at prevailing prices with currently available financing. Most commonly used indexes compare the amount of income of the typical household in an area to the required monthly payment of the typical house in the area (Barron’s Dictionary of Real Estate Terms)
The National Association of REALTORS® Housing Affordability Index through 2014, shows that Denver-Aurora, CO MSA falls below the housing affordability for the US, but is fairly inline with the housing affordability for the region. Meaning compared to the United States, Denver, CO is less affordable compared to other cities.