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New Jersey Housing Affordability Index - HAI

The New Jersey Housing Affordability Index (HAI) has increased in harmony with the national Housing Affordability Index. The NJ HAI decreased a bit in 2010.

 

New Jersey Housing Affordability Index

 

The Housing Affordability Index (national) has reached an all time high in the 2010. Home prices have corrected to the lowest in years and the interest rates have made historical lows, thus explaining the HAI explosion in the past couple of years (2009 & 2010).

 

Housing Affordablility Index

Historical data from Realtor.org

 

What is the New Jersey Housing Affordability index?


The New Jersey Housing Affordability Index (NJ HAI) is published by the National Association of Realtors (NAR).
It measures the relationship between median priced home, median family income and mortgage rates to determine if a median income family can qualify for a mortgage on a median priced home.
The calculation assumes a down payment of 20 percent and it assumes a qualifying ratio of 25 percent. Simply said, it tracks whether housing is becoming more or less affordable for the typical household.


How to interpret this index?

A value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. A New Jersey Housing Affordability Index of 115.0 means a family earning the median family income has 115% of the income necessary to qualify for a conventional mortgage on a median-priced home.


Basically, an increase in the Housing Affordability Index shows a median income family is more able to afford the median priced home. Also a higher index number indicates that more households can afford to purchase a home.

 

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