Department of Numbers

Birmingham, Alabama Home Affordability

The data below measures home affordability for the Birmingham-Hoover, Alabama metropolitan area using price-to-income and price-to-rent metrics.1 The maximum affordable loan amount for the median household income is also calculated. You can also compare Birmingham home affordability to other cities.

Birmingham, Alabama Home Price-to-Income Ratios

The current price-to-income ratio for Birmingham is 3.46 as determined by December 2013 Realtor median sales prices. The second chart shows a history of the ratio as an index calculated from the Federal Housing Finance Agency's Birmingham HPI series. Median household income data for Birmingham is from the Census American Community Survey.

Price-to-Income Dollar Ratio: Realtor

Price-to-Income Index Ratio: FHFA

Note: Index set to 100 in Q1 of 2000

Birmingham, Alabama Home Price-to-Income Ratio History

Date Realtor
(Dollar Ratio)
FHFA
(Index Ratio)
December 2013 3.46 109.3
September 2013 3.71 109.2
June 2013 3.71 109.5
March 2013 3.10 108.8
December 2012 3.23 109.6
September 2012 3.23 109.5
June 2012 3.23 108.7
March 2012 3.23 108.2
December 2011 3.06 112.8

Birmingham, Alabama Home Price-to-Rent Ratios

The current adjusted price-to-rent ratio for Birmingham is 21.51 as determined by December 2013 Realtor median sales prices. This ratio is calculated using household size adjusted median contract rent for Birmingham. The chart below shows an index of the rent ratio calculated from the metro FHFA HPI series and the Birmingham median contract rent data from the Census ACS.

Price-to-Rent Dollar Ratio: Realtor, Realtor Adjusted Rent

Price-to-Rent Index Ratio: FHFA

Note: Index set to 100 in Q1 of 2000

Birmingham, Alabama Home Price-to-Rent Ratio History

Date Realtor
(Dollar Ratio)
Realtor Adjusted
(Dollar Ratio)
FHFA
(Index Ratio)
December 2013 23.11 21.51 88.8
September 2013 24.83 23.11 88.8
June 2013 24.83 23.11 89.0
March 2013 20.74 19.30 88.4
December 2012 21.60 20.10 89.1
September 2012 21.60 20.10 89.0
June 2012 21.60 20.10 88.4
March 2012 21.60 20.10 87.9
December 2011 20.88 20.07 93.5

Birmingham, Alabama Home Rent-to-Mortgage Payment Ratio

The rent-to-mortgage payment ratio uses the adjusted rent for Birmingham against a 100% loan-to-value mortgage (30-year fixed) for the median price home using Realtor home sales statistics. It's a lot like a cap rate, but I find it more appealing in ratio form. A ratio of 1.0 means that annual rent is equivalent annual mortgage payments. Values less than 1.0 indicate rents are cheaper and values greater than 1.0 mean mortgage payments are cheaper. Beware, taxes are not considered here. The rent-to-mortgage payment ratio for Birmingham was 0.77 in December 2013.

Rent-to-Mortgage Payment Dollar Ratio: Realtor

Birmingham, Alabama Home Rent-to-Mortgage Payment Ratio History

Date Realtor Adjusted Rent
(Dollar Ratio)
December 2013 0.77
September 2013 0.71
June 2013 0.75
March 2013 0.95
December 2012 0.94
September 2012 0.92
June 2012 0.90
March 2012 0.87
December 2011 0.87

Birmingham, Alabama Inferred Affordable Mortgage

The inferred affordable mortgage value is determined by taking the median household income for Birmingham, Alabama and calculating the mortgage 30% of that income could afford. Traditionally, 30% of income is the maximum amount a homeowner could use towards a home loan. Inferred affordable loan values are calculated from ACS median household income and average monthly mortgage rates.

Inferred Affordable Mortgage

Birmingham, Alabama Inferred Affordable Mortgage History

Date Inferred Mortgage
February 2014 $236,238
January 2014 $232,635
December 2013 $231,816
November 2013 $237,363
October 2013 $239,351
September 2013 $231,000
August 2013 $231,816
July 2013 $234,288
June 2013 $242,818
May 2013 $259,057
April 2013 $261,972
March 2013 $258,096
February 2013 $259,378

1. Specifically, home prices are from the non seasonally adjusted FHFA all-transactions quarterly series. Dollar ratios are calculated using NAR metro prices when available. Rent and income data are from the Census ACS and are carried forward into the following year prior to release of the new data.