C. Median Multiple Analysis

C. Median Multiple Analysis

The median home price in each MSA only tells half the story. It gives us relative information on the price of a home, but it does not consider that there can be very significant income differences across cities, too. Since our concern is around the relative cost of housing and the general economic competitiveness of the region, we next use a measure of housing affordability that incorporates both prices and incomes.

One of the most commonly used measures of housing affordability is the so-called “median multiple.” This multiple is defined to be the ratio of the median home price to the median income that is:

The median multiple measures how many years of income the median earner in a region would have to use to buy the median house. By convention, a median multiple below three is considered

The State of Housing in Charlotte Report 2022