Raleigh, North Carolina Home Affordability

The data below measures home affordability for the Raleigh-Cary, North Carolina 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 Raleigh home affordability to other cities.

Raleigh, North Carolina Home Price-to-Income Ratios

The current price-to-income ratio for Raleigh is 3.88 as determined by September 2011 Realtor median sales prices. The second chart shows a history of the ratio as an index calculated from the Federal Housing Finance Agency's Raleigh HPI series. Median household income data for Raleigh 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

Raleigh, North Carolina Home Price-to-Income Ratio History

Date	Realtor (Dollar Ratio)	FHFA (Index Ratio)
December 2011	—	108.8
September 2011	3.88	110.0
June 2011	4.23	108.6
March 2011	3.97	110.1
December 2010	3.76	111.7
September 2010	3.76	112.0
June 2010	3.76	111.3
March 2010	3.76	112.0
December 2009	3.63	110.5

Raleigh, North Carolina Home Price-to-Rent Ratios

The current adjusted price-to-rent ratio for Raleigh is 23.95 as determined by September 2011 Realtor median sales prices. This ratio is calculated using household size adjusted median contract rent for Raleigh. The chart below shows an index of the rent ratio calculated from the metro FHFA HPI series and the Raleigh 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

Raleigh, North Carolina Home Price-to-Rent Ratio History

Date	Realtor (Dollar Ratio)	Realtor Adjusted (Dollar Ratio)	FHFA (Index Ratio)
December 2011	—	—	109.0
September 2011	26.89	23.95	110.2
June 2011	29.32	26.11	108.8
March 2011	27.57	24.55	110.3
December 2010	26.09	23.23	111.9
September 2010	26.09	23.23	112.2
June 2010	26.09	23.23	111.5
March 2010	26.09	23.23	112.2
December 2009	25.64	23.51	112.7

Raleigh, North Carolina Home Rent-to-Mortgage Payment Ratio

The rent-to-mortgage payment ratio uses the adjusted rent for Raleigh 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 Raleigh was 0.72 in September 2011.

Rent-to-Mortgage Payment Dollar Ratio: Realtor

Raleigh, North Carolina Home Rent-to-Mortgage Payment Ratio History

Date	Realtor Adjusted Rent (Dollar Ratio)
December 2011	—
September 2011	0.72
June 2011	0.63
March 2011	0.64
December 2010	0.69
September 2010	0.72
June 2010	0.69
March 2010	0.67
December 2009	0.67

Raleigh, North Carolina Inferred Affordable Mortgage

The inferred affordable mortgage value is determined by taking the median household income for Raleigh, North Carolina 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

Raleigh, North Carolina Inferred Affordable Mortgage History

Date	Inferred Mortgage
January 2012	$305,828
December 2011	$304,349
November 2011	$303,247
October 2011	$300,336
September 2011	$298,897
August 2011	$293,239
July 2011	$283,718
June 2011	$285,049
May 2011	$280,756
April 2011	$274,338
March 2011	$274,338
February 2011	$270,903
January 2011	$276,878