The percentage of homes considered affordable for families making the median income began to decrease due to the rise in the median sales price since 2011, while family income declined. Median income remains relatively stagnant, but the 2016 median sales price was as high as pre-recession prices, which has counted to rise to new highs in 2018.
The Housing Opportunity Index (HOI) is defined as the share of homes that would have been affordable to a family earning the local median income based on standard mortgage underwriting criteria. National Association of Home Builders assumes that a family can afford to spend 28% of its gross income on housing. In addition to principal and interest, cost then also includes estimated property taxes and property insurance for the home. Mortgage insurance is not currently a component of the HOI.