For a given amount of income, how much should owning a house cost? That’s really the issue that a housing affordability index needs to address. And as Barry Ritholtz recently noted, it’s an issue that the National Association of Realtors®’ Housing Affordability Index completely fails to achieve (typos repaired):
via Political Calculations: Setting the Baseline for a Better Housing Affordability Index.
- Housing Affordability Index: Still Worthless (ritholtz.com)
- Housing Affordability (oregoneconomicanalysis.wordpress.com)