Therion Senior Member Member Bio Joined Apr 22, 2008 Messages 1,245 Reaction score 198 Feb 15, 2009 #1 Can anyone explain how the "affordability ratio" is calculated? I know it is the average housing price divided by average income, but is it gross or net income? What is the average value, long-term, supposed to be?
Can anyone explain how the "affordability ratio" is calculated? I know it is the average housing price divided by average income, but is it gross or net income? What is the average value, long-term, supposed to be?
C cdr108 Senior Member Member Bio Joined Apr 22, 2008 Messages 4,724 Reaction score 59 Feb 15, 2009 #2 According to S&P, the long-term average affordability ratio is 3.5x. It measures the average gross earnings against the average price of a house.
According to S&P, the long-term average affordability ratio is 3.5x. It measures the average gross earnings against the average price of a house.
Therion Senior Member Member Bio Joined Apr 22, 2008 Messages 1,245 Reaction score 198 Feb 16, 2009 #3 Ah, so it is gross earnings. Thanks for the reply, cdr.
