Our Methodology
Transparent, data-driven approach to calculating housing affordability across America.
How We Calculate Required Income
Our calculations follow industry-standard practices used by lenders and housing economists.
1
Gather Market Data
Collect median home prices, mortgage rates, and local tax rates for each market.
2
Calculate Monthly Payment
Determine principal, interest, taxes, and insurance (PITI) for median-priced home.
3
Apply 28% Rule
Divide monthly housing payment by 0.28 to find required gross monthly income.
4
Annualize Income
Multiply monthly requirement by 12 to get annual income requirement.
5
Calculate Affordability
Compare required income to median household income to generate affordability score.
Core Formula
Required Annual Income = (Monthly PITI ÷ 0.28) × 12
Where PITI = Principal + Interest + Taxes + Insurance
Key Assumptions
Standard industry assumptions used in our calculations.
Limitations & Considerations
Important Notes
- Calculations are estimates based on median values and standard assumptions
- Individual circumstances may vary significantly from median calculations
- Local variations in taxes, HOA fees, and other costs are not fully captured
- Not a substitute for professional financial or real estate advice