What is the Home Ownership Affordability Monitor? A Guide to the Atlanta Fed's Housing Affordability Data Tool
This guide explains how the Atlanta Fed's Home Ownership Affordability Monitor tool works and how it helps users understand housing affordability at the national and local levels.
What is the HOAM Tool?
The HOAM tool measures whether the median-income household can afford the median-priced home in their area. The tool considers principal and interest costs in addition to homeowner’s insurance, property taxes, and other components of home ownership cost to determine affordability.
How does the HOAM tool and affordability index work?
HOAM allows users to assess home ownership affordability through two metrics: share of median income and an affordability index.
If the median-income household spends more than 30 percent of its annual income to own the median-priced home, home ownership is considered unaffordable. Similarly, an affordability index score below 100 indicates home ownership is unaffordable, while a score above 100 means a median-priced home is affordable for a median-income household. HOAM enables users to choose between national or metro area data and view results on easy-to-read graphs.
Why is the HOAM tool useful?
HOAM lets users explore home ownership affordability at national and local (or metro) levels, providing broad and personalized perspectives. Users can find their own metro area, and the tool updates monthly to reflect the latest market conditions.
How do you interpret the HOAM Tool?
In addition to the share of median income and affordability index options described above, the tool presents several interactive graphs to access affordability. These include graphs for the drivers of affordability, affordability gaps between actual median income and qualified income, and a housing cost breakdown for at both the national and metro level.
Which factors impact housing affordability?
Several factors impact whether housing is affordable in each area:
- Change in home prices
- Availability of inventory for sale
- Income growth rate
- Mortgage rates
- Property taxes
- Job markets
- Property insurance
See the HOAM tool’s breakdown of drivers of affordability under the Drivers tab for more information from the Atlanta Fed.
How affordable are homes in my area?
As described above, HOAM simplifies finding home ownership affordability data in your area. Just select your metro area and choose whether you want to view data through the share of median income or affordability index method.
The metro view includes tabs on metro affordability, drivers, affordability gap, price/income, share of income, county level, and cost breakdown, so you can see where your area falls in terms of affordability.
How can I access the HOAM tool and learn more about it?
You can learn more about HOAM, how it works, home ownership by area, and more on the Atlanta Fed’s website or with the EconomyNow app.