Median multiple
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]
Housing Affordability Rating
[edit]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 |
See also
[edit]- Real-estate bubble#Housing affordability measures
- Affordable housing
- Inclusionary zoning
- Land-use planning
- Land titling
- Real estate
- Demographia
References
[edit]- ^ "Real Estate Bubbles and the "Median Multiple Index"". Ted's Blog. Retrieved 2016-02-13.[permanent dead link]
- ^ "The Housing Indicators Program". World Bank. Retrieved 13 February 2016.
- ^ Angel, Shlomo (2000-10-20). Housing Policy Matters: A Global Analysis. Oxford University Press, USA. ISBN 9780195350326.
- ^ "Ratio of House Prices to Income". UK's Mortgage Guide. 2017-10-09. Retrieved 2022-05-09.
- ^ "2nd Annual Demographia International Housing Affordability Survey: 2006" (PDF). Demographia. 2006. Retrieved 9 May 2022.
- ^ "10th Annual Demographia International Housing Affordability Survey: 2014" (PDF). Demographia. 2014. Retrieved 13 February 2016.
- ^ "Demographia International Housing Affordability 2024 Edition" (PDF). Demographia. 2024. Retrieved 1 January 2025.