Housing Affordability Index Calculator
Created by: Emma Collins
Last updated:
Enter the median home price, median household income, and current mortgage rate to calculate the Housing Affordability Index. An HAI above 100 means the median family can afford the median home; below 100 means they cannot.
Housing Affordability Index Calculator
FinanceCalculate the Housing Affordability Index (HAI) for any market. An HAI of 100 means the median family can just afford the median home — above 100 is affordable, below is not.
Annual gross income for the median household
What Is the Housing Affordability Index?
The Housing Affordability Index (HAI), popularized by the National Association of Realtors, measures how attainable the median home is for a median-income household.
When the HAI equals 100, the median family earns exactly enough to qualify for a mortgage on a median-priced home at the 28% front-end DTI standard.
Above 100 means the market is accessible; below 100 means the typical family is priced out.
Rate changes move the HAI dramatically.
The affordability crisis of 2022–2023 was driven not by price alone — mortgage rates more than doubled from 3% to over 7%, raising the qualifying income for a median home by over $30,000 in many markets.
This calculator lets you model any combination of price, income, and rate to understand affordability at a specific point in time or compare across markets.
How the Housing Affordability Index Is Calculated
The monthly P&I payment is calculated on the loan amount (median price minus down payment).
That payment divided by the front-end DTI ratio (default 28%) gives the required gross monthly income.
Multiply by 12 for annual qualifying income.
The HAI is (median household income / qualifying income) × 100.
If HAI ≥ 100, the median family can afford the median home.
Housing Affordability Index Formulas
Loan amount = median home price × (1 − down payment %)
Monthly P&I = loan × r(1+r)^n / ((1+r)^n − 1)
Qualifying monthly income = monthly P&I / front-end DTI ratio
Qualifying annual income = qualifying monthly income × 12
HAI = (median household income / qualifying annual income) × 100
HAI > 100 → median family CAN afford the median home
HAI < 100 → median family CANNOT afford the median home
Income gap = qualifying income − median household income
Example Scenarios
National Market at 7% Rate
Median home price: $420,800. Down payment: 20% ($84,160). Loan: $336,640 at 7.0%, 30-year. Monthly P&I: $2,240. Qualifying income (28% DTI): $96,000/year. Median household income: $77,000. HAI: 80.2 — median family CANNOT afford the median home, falling $19,000/year short. This matches the historically low affordability readings seen in 2023.
Same Market at 4% Rate (2020 Environment)
Median home price: $320,000 (pre-pandemic). Down payment: 20% ($64,000). Loan: $256,000 at 4.0%, 30-year. Monthly P&I: $1,222. Qualifying income: $52,371/year. Median household income: $68,000. HAI: 129.8 — median family can afford the median home with substantial headroom. Demonstrates how dramatically rate increases have compressed affordability.
How People Use This Calculator
- Homebuyers evaluating whether a specific city or metro is accessible at current prices and rates.
- Investors tracking HAI trends to identify markets where affordability is improving or deteriorating.
- Economists and policy analysts monitoring housing market stress in specific regions.
- Real estate agents explaining to buyers why affordability has changed even when prices are flat.
- Financial journalists using a quantitative framework to benchmark housing market conditions.
Tips for Using the Housing Affordability Index
Track HAI changes over time, not just the absolute level.
A market with an HAI of 85 that was 75 a year ago is becoming more affordable — the direction matters as much as the number.
Rate drops, income growth, and price corrections all improve the index.
Watching the trend helps buyers decide whether to act now or wait for better conditions.
Remember that the HAI represents the median household income versus the median home price.
If your income is above median, the market will be more accessible to you than the index suggests.
Conversely, if you are at or below median income, markets with HAIs close to 100 may still be a stretch once property taxes, insurance, and PMI are added to the qualifying calculation.
Frequently Asked Questions
What is the Housing Affordability Index (HAI)?
The Housing Affordability Index (HAI) measures whether a median-income family can qualify for a mortgage on a median-priced home. An HAI of 100 means the median family earns exactly enough to qualify. An HAI above 100 means the median family can afford the median home — higher is more affordable. Below 100 means the median family cannot afford the median home at current prices and rates.
How is the HAI calculated?
The HAI is calculated as: (median household income / qualifying income) × 100. Qualifying income is the annual income needed to make the monthly mortgage payment on the median home at the standard 28% front-end DTI ratio. For example, if the monthly payment is $2,800 and the 28% DTI requires $10,000/month (or $120,000/year) to qualify, and the median household earns $80,000, the HAI is ($80,000 / $120,000) × 100 = 66.7 — meaning the typical family cannot afford the typical home.
What front-end DTI ratio does the HAI use?
The standard HAI calculation uses a 28% front-end DTI ratio — the conventional guideline that housing costs should not exceed 28% of gross monthly income. This means 28% of income is assumed to be available for principal, interest, taxes, and insurance (PITI). This calculator uses only P&I in the qualifying income calculation for simplicity; adding property taxes and insurance would require additional inputs.
How does the mortgage rate affect the HAI?
Mortgage rates have a dramatic impact on affordability. At 3.0%, a $400,000 home (20% down, $320,000 loan) requires a monthly P&I of $1,349 — qualifying income of $57,814/year. At 7.0%, the same loan requires $2,129/month — qualifying income of $91,243/year. A rate increase from 3% to 7% raises the qualifying income by $33,429, severely reducing HAI even with unchanged home prices.
What is a "qualifying income"?
Qualifying income is the gross annual income required to make the monthly mortgage payment while staying within the 28% front-end DTI guideline. Monthly payment ÷ 28% = required gross monthly income. Multiply by 12 for annual qualifying income. If the median household income exceeds qualifying income, the median family can afford the median home.
How can I use the HAI to evaluate a housing market?
Compare HAI across markets or track it over time for the same market. When HAI drops below 100, buyers are being priced out — this often signals price softening ahead as demand weakens. When HAI is very high (150+), the market is broadly affordable and prices may have upward room. NAR publishes monthly HAI data for national, regional, and major metro markets using this methodology.
Sources and References
- National Association of Realtors (NAR). Housing Affordability Index. nar.realtor/research-and-statistics.
- Federal Reserve Bank of Atlanta. Home Ownership Affordability Monitor (HOAM). atlantafed.org.
- Harvard Joint Center for Housing Studies. America's Rental Housing, 2023.