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A New Home Affordability Estimate: What Share of Housing Stock Can Families Afford?


  • Chi-Cheol Chung

    () (Federal Housing Finance Agency)

  • Andrew V. Leventis

    () (Federal Housing Finance Agency)

  • William M. Doerner

    () (Federal Housing Finance Agency)

  • David Roderer

    () (Federal Housing Finance Agency)

  • Michela Barba

    () (Federal Housing Finance Agency)


We offer a new home affordability estimate (HAE) that focuses on the share of housing stock that is affordable to certain households in the United States. The methodology considers affordability as it relates to funds available for down payments, initial monthly housing-related payments, and future projections of household income and costs. The HAE builds upon existing industry statistics in two ways. First, existing affordability indexes make certain assumptions for one or more of those funding factors. We can observe actual investment and expense values. Second, existing industry statistics consider "typical" families that earn the median household income level. The HAE is sufficiently more flexible for evaluating families at different places in the income distribution. This paper discusses the assumptions and processes for creating the HAE indexes; compares the national time series for very low-, low-, and medium-income families; and then documents trends across metropolitan areas. We offer the data for public usage and leave commentary about implications to future research.

Suggested Citation

  • Chi-Cheol Chung & Andrew V. Leventis & William M. Doerner & David Roderer & Michela Barba, 2018. "A New Home Affordability Estimate: What Share of Housing Stock Can Families Afford?," FHFA Staff Working Papers 18-04, Federal Housing Finance Agency.
  • Handle: RePEc:hfa:wpaper:18-04

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    More about this item


    affordability; housing; mortgage; personal finance; real estate;

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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