A home purchase is usually the most important one in our lifetime. Obviously, the price needs to be manageable to our income flows. Otherwise, financial hardship can easily follow, as the events of the 2008-2009 Great Recession illustrated. Further, a high percentage of homeownership is a policy goal of many elected officials and non-profits: ownership is said to lead to a greater sense of participation in the life of a community, and ultimately, in society.
From an economic development perspective, housing prices can impact a community's ability to attract and retain workers. For many reasons, then, it is in the interest of a broad range of parties to see "affordable" home prices in their community.
The Housing Affordability Index (HAI) is calculated and maintained by the Washington Center for Real Estate Research (WCRER) and measures the ability of a middle-income family to make mortgage payments on a median-priced resale home. More specifically, it assumes a median-priced home, 20% down-payment, a 30-year fixed mortgage, and middle income for the area.
A central assumption of the Index is that the household does not spend more than 25% of its income on principal and interest payments. When the index lies at 100, the household pays exactly this share of its income to principal and interest. When the index lies above 100 it pays less, and when it is below 100, the household pays more. For example, if the index in an area is 154.2, the household has 154.2% of the income required to make payments on a median-priced resale home.
This indicator measures the Housing Affordability Index (HAI) for all homebuyers in Walla Walla County. Washington State is offered as a benchmark. Additional information, including historical data beginning in the first quarter of 1998, can be found in the “Download Data” section.
