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Housing indicator measure of affordability From Wikipedia, the free encyclopedia
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.[1] The Median house price to income ratio was the primary indicator H1 of the 1991 World Bank/UNCHS Housing Indicator system.[2][3] 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.[4]
The indicator has been popularised by Demographia International, and was called the 'Median multiple' from their second comparative international survey in 2006.[5]
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.[6]
The 2024 Demographia International Housing Affordability report uses the following affordability categories based on the median multiple for a given market:[7]
| Housing Affordability Rating | Median Multiple |
|---|---|
| Affordable | 3.0 & Under |
| Moderately Unaffordable | 3.1 to 4.0 |
| Seriously Unaffordable | 4.1 to 5.0 |
| Severely Unaffordable | 5.1 to 8.9 |
| Impossibly Unaffordable | 9.0 & Over |
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