Full Citation

Title: A DYNAMIC HOUSING AFFORDABILITY INDEX

Citation Type: Journal Article

Publication Year: 2016

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: This report outlines an approach to constructing a Dynamic Housing Affordability Index (DHAI) that reflects the true cost of owner-occupied housing and performs well in tracking changes in the demand for homeownership. Economic theory suggests that an “owner cost” measure achieves these goals. Such a measure considers the price of housing and also related costs such as mortgage interest, property taxes, insurance, transactions costs, and depreciation and maintenance. It takes into account the benefits from the mortgage interest and property tax deductions and it considers the role of expected house price inflation in reducing the cost of housing. We show that the DHAI predicts national, regional, and MSA consumer sentiment with respect to the housing market (a measure of the demand for owner-occupied housing) and regional and MSA (but not national) homeownership rates during the 2007 to 2014 period.

Url: https://realtoru.edu/wp-content/uploads/2016/11/NAR_RU_JCRES_Vol4No1-2.pdf#page=29

User Submitted?: No

Authors: Bourassa, Steven, C; Haurin, Donald, R

Periodical (Full): The Journal of the Center for Real Estate Studies

Issue: 1

Volume: 4

Pages: 28-48

Data Collections: IPUMS USA

Topics: Housing and Segregation

Countries: United States