Arizona Home Affordability

The data below quantifies Arizona home affordability by using home prices and home price indices to calculate price-to-income and price-to-rent ratios.¹ The maximum affordable loan amount for the median household income is also calculated. You can also compare Arizona home affordability to other states.

Arizona Home Price-to-Income Ratios

The home price-to-income ratio for Arizona comes from the Federal Housing Finance Agency's relatively new state median price series and their purchase only index combined with Arizona annual median household income data. The FHFA home price series yields a dollar ratio (top chart) while the index results in an index ratio (bottom chart). Based on the latest FHFA state home prices in June 2010, the price-to-income ratio for Arizona was 3.12.

Home Price-to-Income Dollar Ratio: FHFA

Home Price-to-Income Index Ratio: FHFA

Note: Index set to 100 in Q1 of 2000

Arizona Home Price-to-Income Ratio History

Date	FHFA (Dollar Ratio)	FHFA (Index Ratio)
December 2011	—	94.2
September 2011	—	90.5
June 2011	—	90.5
March 2011	—	93.5
December 2010	—	96.5
September 2010	—	101.6
June 2010	3.12	105.8
March 2010	3.09	106.8
December 2009	3.28	115.3
September 2009	3.28	117.3

Arizona Home Price-to-Rent Ratios

The price-to-rent ratio for Arizona is determined for both the FHFA median price and the purchase only index by calculating a ratio with the median contract rent. The price-to-adjusted rent value takes into account CPS reported household size to attempt to correct for quality differences in renter and owner occupied homes. More on that process here. Again, the median price ratio is a dollar ratio and the HPI ratio is an index ratio defined to be 100 in Q1 2000. The adjusted price-to-rent ratio for Arizona was 17.49 in June 2010.

Home Price-to-Rent Dollar Ratio: FHFA, FHFA Adjusted Rent

Home Price-to-Rent Index Ratio: FHFA

Note: Index set to 100 in Q1 of 2000

Arizona Home Price-to-Rent Ratio History

Date	FHFA (Dollar Ratio)	FHFA Adjusted (Dollar Ratio)	FHFA (Index Ratio)
December 2011	—	—	85.1
September 2011	—	—	81.8
June 2011	—	—	81.8
March 2011	—	—	84.5
December 2010	—	—	87.1
September 2010	—	—	91.8
June 2010	17.36	17.49	95.5
March 2010	17.16	17.29	96.5
December 2009	17.08	17.33	97.6

Arizona Inferred Affordable Mortgage

The inferred affordable mortgage is determined by taking the median household income for Arizona 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 median household income and average monthly mortgage rates. The amounts are not adjusted for inflation.

Inferred Affordable Mortgage

Arizona Inferred Affordable Mortgage History

Date	Inferred Mortgage
January 2012	$249,986
December 2011	$248,778
November 2011	$247,877
October 2011	$245,498
September 2011	$244,321
August 2011	$239,697
July 2011	$231,914
June 2011	$233,002
May 2011	$229,492
April 2011	$224,247
March 2011	$224,247
February 2011	$221,439
January 2011	$226,323